- Question ID
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2015_2105
- Legal act
- Directive 2014/59/EU (BRRD)
- Topic
- Intra-group financial support
- Article
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23
- Paragraph
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1
- Subparagraph
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h
- 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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Authorisation to breach large exposures requirements in the context of IGFS
- Question
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How do national legislators transpose Article 23 (1) (h) of Directive 2014/59/EU (BRRD) in accordance with the CRR and the CRD IV?
- Background on the question
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Article 23 (1) (h) BRRD states that “the group entity providing the support complies, at the time when the support is provided, with the requirements relating to large exposures laid down in Regulation 575/2013 and in Directive 2013/36/EU including any national legislation exercising the options provided therein, and the provision of the financial support shall not cause the group entity to infringe those requirements, unless authorised by the competent authority responsible for the supervision on an individual basis of the group entity providing the support”. Neither Regulation (EU) No 575/2013 (CRR) nor Directive 2013/36/EU (CRD) provide competent authorities with any possibility to authorize a breach in advance. Article 396 CRR states that the competent authority can allow an institution that has reported a breach of the limit set out in Article 395 (1) CRR a limited period of time in which to comply with the limit. Hence competent authorities are not allowed to specify the duration and the conditions of an authorized breach since they cannot authorize a breach at all. Therefore it would appear that Article 23 (1) h BRRD is incompatible with the CRR / CRD IV.
- Submission date
- Final publishing date
-
- Final answer
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Article 396 Regulation (EU) No 575/2013 (CRR) does not entitle the competent authority to authorise a breach of the requirements under Article 395 (1) CRR; however Article 23 (1) (h) Directive 2014/59/EU (BRRD) contains such power. Within its scope of application, intragroup financial support in an early intervention scenario, this special provision therefore takes precedence over the provisions of the CRR (lex specialis). The same is true for authorisations to deviate from capital or liquidity requirements under Article 23 (1) (g) BRRD.
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
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Answer prepared by the European Commission because it is a matter of interpretation of Union law.
- Note to Q&A
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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.