- Question ID
-
2015_1921
- Legal act
- Directive 2014/59/EU (BRRD)
- Topic
- Resolution financing arrangements
- Article
-
103
- Paragraph
-
2
- COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
- Not applicable
- Article/Paragraph
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n.a.
- Type of submitter
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Competent authority
- Subject matter
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Basis for ex-ante contributions to resolution financing arrangements
- Question
-
What does Article 103(2) of BRRD mean by the requirement to ”exclude own funds” from the liabilities of institutions when determining the ex-ante contribution to resolution financing arrangements?
- Background on the question
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BRRD in its Article 103 (2) stipulates, that the ex-ante contribution of each institution shall be pro rata to the amount of its liabilities (excluding own funds) less covered deposits, with respect to the aggregate liabilities (excluding own funds) less covered deposits of all the institutions authorized in the territory of the Member State. The European Commission delegated regulation 2015/63 (EU) further specifies - total liabilities in Article 3 (11) as “total liabilities as defined in Section 3 of Council Directive 86/635/EEC, or as defined in accordance with the International Financial Reporting Standards (“IFRS”) referred to in Regulation (EC) No 1606/2002 of the European Parliament and of the Council”, and - own funds in Article 3 (16) as “own funds as defined in point (118) of Article 4(1) of Regulation (EU) No 575/2013 (“CRR”).
- Submission date
- Final publishing date
-
- Final answer
-
Resolution authorities can choose which one of the two definitions of total liabilities to use. The two definitions in Commission Delegated Regulation (EU) 2015/63 were provided so that for all institutions at least one of them would be applicable. If certain items of own funds are not included in the applied definition of total liabilities they should not be subtracted.
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
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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.