Question ID:
2015_2345
Legal Act:
Directive 2014/59/EU (BRRD)
Topic:
Resolution tools and powers
Article:
40, 42
Paragraph:
2, 2
Subparagraph:
a, a
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations:
Not applicable
Article/Paragraph:
n.a.
Disclose name of institution / entity:
No
Type of submitter:
Competent authority
Subject Matter:
Requirements regarding „control” by the resolution authority
Question:

Are the requirements of “control” of the bridge bank (Article 40(2)(a)) and asset separation tool (Article 42(2)(a)) met if the conditions specified under Article 41(1) and Article 42(4) respectively are satisfied?

Background on the question:

Article 40(2)(a) of Directive 2014/59/EU (BRRD) states that “The bridge institution shall be a legal person that meets all of the following requirements: (a) it is wholly or partially owned by one or more public authorities which may include the resolution authority or the resolution financing arrangement and is controlled by the resolution authority; […]” and Article 42(2)(a) of Directive 2014/59/EU (BRRD) states that “For the purposes of the asset separation tool, an asset management vehicle shall be a legal person that meets all of the following requirements: (a) it is wholly or partially owned by one or more public authorities which may include the resolution authority or the resolution financing arrangement and is controlled by the resolution authority; […]”.


Are both requirements of “control” of the bridge bank (Article 40(2)(a)) and asset separation tool (Article 42(2)(a)) enough to meet the conditions specified under Article 41(1) (“Member States shall ensure that the operation of a bridge institution respects the following requirements: […]”and Article 42(4) respectively (“Member States shall ensure that the operation of an asset management vehicle respects the following provisions [...]”) ? Or are there any other requirements regarding the "control" by the resolution authority?

Date of submission:
30/09/2015
Published as Final Q&A:
09/12/2016
Final Answer:

The concept of control for the purposes of Articles 40(2)(a) and 42(2)(a) of Directive 2014/59/EU (BRRD) is not defined in the Directive. That concept does not necessarily fully correspond with the requirements laid out under Articles 41(1) and 42(4) BRRD. It may be wider, but it certainly implies that the resolution authority is entrusted with the necessary powers to ensure that the requirements set out in Articles 41(1) and 42(4) of Directive 2014/59/EU (BRRD) are met.

Disclaimer:

This question goes beyond matters of consistent and effective application of the regulatory framework. A Directorate General of the Commission (Directorate General Financial Stability, Financial Services and Capital Markets Union) has prepared the answer, albeit that only the Court of Justice of the European Union can provide definitive interpretations of EU legislation. This is an unofficial opinion of that Directorate General, which the European Banking Authority publishes on its behalf. The answers are not binding on the European Commission as an institution. You should be aware that the European Commission could adopt a position different from the one expressed in such Q&As, for instance in infringement proceedings or after a detailed examination of a specific case or on the basis of any new legal or factual elements that may have been brought to its attention.

Status:
Final Q&A
Answer prepared by:
Answer prepared by the European Commission because it is a matter of interpretation of Union law.
Note to Q&A:

Update 26.03.2021: This Q&A has been reviewed in the light of the changes introduced to Directive 2014/59/EU (BRRD) and continues to be relevant.

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