- Question ID
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2015_2120
- Legal act
- Directive 2014/59/EU (BRRD)
- Topic
- MREL
- Article
-
45b
- Paragraph
-
4, 5, 7
- COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
- Not applicable
- Article/Paragraph
-
Not applicable
- Name of institution / submitter
-
Financial Supervision Authority
- Country of incorporation / residence
-
Estonia
- Type of submitter
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Competent authority
- Subject matter
-
Calculation of MREL
- Question
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For the purpose of calculating the total liabilities, including own funds of the resolution entity, as provided under Article 45b(4), (5) and (7) BRRD, should we account for financial instruments that qualify as both own funds and liabilities (such as subordinated debt) in both categories? If so, would this not amount to a double counting of the same financial instruments?
- Background on the question
-
The formula seems to have double counting in it which would not make much sense.
- Submission date
- Final publishing date
-
- Final answer
-
The reference to total liabilities, including own funds, in Article 45b(4), (5) and (7) "
The minimum requirement shall be calculated as the amount of own funds and eligible liabilities expressed as a percentage of the total liabilities and own funds of the institution." in Article 45(1)of Directive 2014/59/EU (BRRD)shallshould be read as the sum of "own funds" and "total liabilities, less those elements of own funds that are included in the amount of total liabilities". The objective of adjusting the amount of total liabilities is to ensure that there is no double counting.Disclaimer:
The answers clarify provisions already contained in the applicable legislation. They do not extend in any way the rights and obligations deriving from such legislation nor do they introduce any additional requirements for the concerned operators and competent authorities. The answers are merely intended to assist natural or legal persons, including competent authorities and Union institutions and bodies in clarifying the application or implementation of the relevant legal provisions. Only the Court of Justice of the European Union is competent to authoritatively interpret Union law. The views expressed in the internal Commission Decision cannot prejudge the position that the European Commission might take before the Union and national courts.
- 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 not yet been reviewed by the European Commission in the light of the changes introduced to Directive 2014/59/EU (BRRD).
Update 02.12.2021: This Q&A has been updated in the light of the changes introduced to Directive 2014/59/EU (BRRD).