Question ID
2018_3802
Legal act
Directive 2014/59/EU (BRRD)
Topic
Resolution tools and powers
Article
64
Paragraph
1
Subparagraph
f
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Not applicable
Article/Paragraph
0
Type of submitter
Individual
Subject matter
Contextual limits to the ancillary power in Article 64.1.f) BRRD
Question

Should the power in Article 64.1.f) BRRD be interpreted as limited by the context of the specific resolution tool used in the particular case?

Background on the question

Article 64.1.f) BRRD grants the resolution authorities the capacity to modify or cancel the terms of contracts to which the institution under resolution is a party. Taken at face value, this would imply an overarching capacity of contractual modification. This could entail a potential conflict with other safeguards contained in BRRD, including the no creditor worse off principle. Considering that this is considered as an ancillary power, this would mean that it may only be used as an auxiliary to a resolution tool. In this regard, a contextual interpretation would avoid potential conflicts with other sections of the Directive; i.e. if the provision is considered to allow such power only within the framework, limitations and safeguards applicable to the main resolution tool which it accompanies.

Submission date
Rejected publishing date
Rationale for rejection

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Status
Rejected question