Question ID:
2016_2954
Legal Act:
Directive 2014/59/EU (BRRD)
Topic:
Write-down and conversion of capital instruments
Article:
59
Paragraph:
6
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:
Interpretation of consolidated prudential requirements
Question:

How should the reference to "consolidated prudential requirements" in Article 59(6) be interpreted?

Background on the question:

It is not clear whether the reference to "consolidated prudential requirements" in Article 59(6) of Directive 2014/59/EU (BRRD) only refers to the requirements under Regulation (EU) No 575/2013 (CRR) and Directive 2013/36/EU (CRD IV), or whether it includes n additional requirements.

Date of submission:
19/10/2016
Published as Final Q&A:
18/11/2016
Final Answer:

Reference to "consolidating prudential requirements" in Article 59(6) of Directive 2014/59/EU (BRRD) should be interpreted as relating to provisions of Regulation (EU) No 575/2013 (CRR) and Directive 2013/36/EU (CRD IV). However, any supplementary requirements under other relevant legislation should be considered as well. This may be the case for certain provisions in the Financial Conglomerates Directive (which contain or have an effect on consolidating prudential requirements) where a conglomerate is identified with a banking entity at its top level and, for instance, a significant insurance subsidiary.

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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