Question ID
2015_1785
Legal act
Directive 2014/59/EU (BRRD)
Topic
Resolution tools and powers
Article
52
Paragraph
7, 8
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Not applicable
Article/Paragraph
1
Type of submitter
Competent authority
Subject matter
Approval of business reorganisation plan
Question

Does only the resolution authority have to be satisfied of the business reorganisation plan referred to in Article 52(7)(8) of Directive 2014/59/EU (BRRD) or is the support of the competent authority required also?

Background on the question

Article 52(7) of the BRRD pertains to the assessment of the business reorganisation plan by the resolution authority. The assessment shall be completed in agreement with the relevant competent authority. The final sentence of Article 52 (7) reads: "If the resolution authority and the competent authority are satisfied that the plan would achieve that objective, the resolution authority shall approve the plan." Article 52(8) reads: "If the resolution authority is not satisfied that the plan would achieve the objective referred to in paragraph 7, the resolution authority, in agreement with the competent authority shall notify the management body of the person or persons appointed in accordance with Article 72(1) of its concerns and require the amendment of the plan in a way that addresses those concerns." Article 52(7) implies that both the competent authority and the resolution authority need to be satisfied that the business reorganisation plan will achieve the required objective. Article 52(8) however does not refer to the situation that the resolution authority is but the competent authority is not satisfied that the business reorganization plan will achieve the required objective. Does Article 52(8) imply that only the resolution authority needs to be satisfied that the business reorganization plan will achieve the required objective?

Submission date
Final publishing date
Final answer

The resolution authority is the lead for the business reorganisation plan approval in the context of resolution. However, the wording "in agreement with the competent authority" referred to in Article 52(7) and (8) of Directive 2014/59/EU means that the agreement expressed by the resolution authority needs to have the backing of the competent authority.

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.

Disclaimer

The Q&A refers to the provisions in force on the day of their publication. The EBA does not systematically review published Q&As following the amendment of legislative acts. Users of the Q&A tool should therefore check the date of publication of the Q&A and whether the provisions referred to in the answer remain the same.