Question ID
2015_1796
Legal act
Directive 2014/59/EU (BRRD)
Topic
Resolution objectives and triggers
Article
33
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Not applicable
Article/Paragraph
1
Type of submitter
Competent authority
Subject matter
Resolution action with regard to a holding
Question

When can a resolution action be taken with regard to a holding according to Article 33(4) of Directive 2014/59/EU (BRRD): are the conditions individual or cumulative?

Background on the question

Subject to Article 33(3), notwithstanding the fact that an entity referred to in point (c) or (d) of Article 1(1) does not meet the conditions established in Article 32(1), resolution authorities may take resolution action with regard to an entity referred to in point (c) or (d) of Article 1(1) when (1) one or more of the subsidiaries which are institutions comply with the conditions established in Article 32(1), (4) and (5) and (2) their assets and liabilities are such that their failure threatens an institution or the group as a whole or (3) the insolvency law of the Member State requires that groups be treated as a whole and (4) resolution action with regard to the entity referred to in point (c) or (d) of Article 1(1) is necessary for the resolution of such subsidiaries which are institutions or for the resolution of the group as a whole. There are four conditions, which are highlighted above. Which of these conditions apply cumulatively, and which apply alternatively?

Submission date
Final answer

The resolution authority should be able to take action with regard to a holding (even if the holding does not meet the conditions for resolution) when in accordance with Article 33 of Directive 2014/59/ EU:                                                                                                      

(1) one or more of the subsidiaries which are institutions comply with the conditions for resolution, PLUS (2) their assets and liabilities (those of the subsidiaries) are such that their failure threatens an institution or the group as a whole OR (3) the insolvency law of the Member State requires that groups be treated as a whole PLUS (4) resolution action with regard to holding is necessary for the resolution of such subsidiaries which are institutions or for the resolution of the group as a whole.

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
Archive
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 archived in light of the changes introduced in Article 33(4) in Directive 2014/59/EU (BRRD).