Sittings · Document

Draft report (COM(2023)0227 – C90135/2023 – 2023/0112(COD)) 2023-11-06

Amending Directive 2014/59/EU as regards early intervention measures, conditions for resolution and financing of resolution action

Committee on Economic and Monetary Affairs

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Amendment 32

Fabio Massimo Castaldo

Proposal for a directive

Recital 1 a (new)

Text proposed by the Commission

Amendment

(1a) The objective of this Directive is to better safeguard taxpayers’ money and establish new systemic mechanisms for addressing situations of potential insolvency of some financial institutions not covered by the existing resolution framework. That framework is designed to curtail the economic burden on society by reducing the overall costs associated with bank failures. The use of taxpayers’ money should, with the introduction of a new framework, be significantly reduced in order to ensure that the resolution financing arrangement is more effectively used.

Or. en

Amendment 33

Pedro Marques, René Repasi, Aurore Lalucq, Costas Mavrides, Jonás Fernández

Proposal for a directive

Recital 1 a (new)

Text proposed by the Commission

Amendment

(1a) At present, the banking union rests on just two of its intended three pillars, namely, the Single Supervisory Mechanism (SSM) and the Single Resolution Mechanism (SRM). It therefore remains incomplete, due to the absence of its third pillar, the European deposit insurance scheme (EDIS). The completion of the banking union forms an integral part of economic and monetary union and of financial stability, most notably by mitigating the risks of so-called ‘doom loop’ that arise as a result of the bank-sovereign nexus.

Or. en

Amendment 34

Lídia Pereira

Proposal for a directive

Recital 1 a (new)

Text proposed by the Commission

Amendment

(1a) The Banking Union is a fundamental pillar of the Economic and Monetary Union (EMU) and its development has been essential to guaranteeing the stability and resilience of the banking sector, including by way of the Single Supervisory Mechanism and the Single Resolution Mechanism. Unfortunately, the Banking Union is not yet complete, owing to the slow adoption of a European deposit insurance scheme (EDIS).

Or. pt

Amendment 35

Martin Schirdewan

Proposal for a directive

Recital 1 a (new)

Text proposed by the Commission

Amendment

(1a) The Union resolution framework is not a substitute for structural reforms in the banking sector. The systemic risks to financial stability associated with institutions that are "too big to fail" remain. Therefore, structural measures, including the separation of investment banking from commercial banking, need to be taken over and above the resolution framework.

Or. en

Amendment 36

Martin Schirdewan

Proposal for a directive

Recital 1 b (new)

Text proposed by the Commission

Amendment

(1b) The Union resolution framework is not a substitute for the establishment of strong safeguards to protect the Union from financial instability. For this reason, not only must the Basel III framework be implemented in full and without derogations, but stronger regulatory capital requirements, going beyond international standards, should be implemented in the Union.

Or. en

Amendment 37

Markus Ferber, Herbert Dorfmann

Proposal for a directive

Recital 2

Text proposed by the Commission

Amendment

(2) Several years into its implementation, the Union resolution framework as currently applicable does not deliver as intended with respect of some of those objectives. In particular, while institutions and entities have made significant progress towards resolvability and have dedicated significant resources to that end, in particular through the build-up of the loss absorption and recapitalisation capacity and the filling-up of resolution financing arrangements, the Union resolution framework is seldom resorted to. Failures of certain smaller and medium-sized institutions and entities are instead mostly addressed through unharmonised national measures. Taxpayer money is used rather than resolution financing arrangements. That situation appears to arise from inadequate incentives. Those inadequate incentives result from the interplay of the Union resolution framework with national rules, whereby the broad discretion in the public interest assessment is not always exercised in a way that reflects how the Union resolution framework was intended to apply. At the same time, the Union resolution framework saw little use due to the risks for depositors of deposit-funded institutions to bear losses to ensure that those institutions can access external funding in resolution, in particular in the absence of other bail-inable liabilities. Finally, the fact that there are less stringent rules on access to funding outside resolution than in resolution has discouraged the application of the Union resolution framework in favour of other solutions, which often entail the use of taxpayers’ money instead of the own resources of the institution and entity or industry-funded safety nets. That situation, in turn, generates risks of fragmentation, risks of suboptimal outcomes in managing institutions and entities’ failures, in particular in the case of smaller and medium-sized institutions and entities, and opportunity costs from unused financial resources. It is therefore necessary to ensure a more effective and coherent application of the Union resolution framework and to ensure that it can be applied whenever that is in the public interest, including for certain smaller and medium-sized institutions primarily funded through deposits and without sufficient other bail-inable liabilities.

Or. en

Amendment 38

Engin Eroglu

Proposal for a directive

Recital 2

Text proposed by the Commission

Amendment

Or. en

Justification

There is no reason to expand the resolution regime in the way the Commission has proposed. The largely harmonised European deposit guarantee schemes have proven their ability to function, as the payout events from Greensill Bank and the cross-border case of Sberbank have shown. For the majority of institutions, it is already possible to ensure an orderly exit from the market without endangering financial market stability through national insolvency/liquidation proceedings. Also, the report submitted by the SRB on resolution planning for Less Significant Institutions (LSIs) in 2021 and 2022 underlines that the current approach is appropriate: According to this report, the NRAs deemed that 96,3% of the LSIs have liquidation as a preferred strategy in case of failure. None of the resolvability assessments carried out by the national resolution authorities found any substantive impediments to resolvability. If, in individual cases, a resolution authority does not make use of its already extensive powers, deficiencies in application in practice do not justify a change of the existing legal framework. Instead, more attention should be paid to the application of the existing legal framework.

Amendment 39

Eero Heinäluoma

Proposal for a directive

Recital 2

Text proposed by the Commission

Amendment

(2) Several years into its implementation, the Union resolution framework as currently applicable does not deliver as intended with respect of some of those objectives. In particular, while institutions and entities have made significant progress towards resolvability and have dedicated significant resources to that end, in particular through the build-up of the loss absorption and recapitalisation capacity and the filling-up of resolution financing arrangements, the Union resolution framework is seldom resorted to. Failures of certain smaller and medium-sized institutions and entities are instead mostly addressed through unharmonised national measures. Taxpayer money is used rather than resolution financing arrangements. That situation appears to arise from inadequate incentives. Those inadequate incentives result from the interplay of the Union resolution framework with national rules, whereby the broad discretion in the public interest assessment is not always exercised in a way that reflects how the Union resolution framework was intended to apply. Finally, the fact that there are less stringent rules on access to funding outside resolution than in resolution has discouraged the application of the Union resolution framework in favour of other solutions, which often entail the use of taxpayers’ money instead of the own resources of the institution and entity or industry-funded safety nets. That situation, in turn, generates risks of fragmentation, risks of suboptimal outcomes in managing institutions and entities’ failures, in particular in the case of smaller and medium-sized institutions and entities, and opportunity costs from unused financial resources. It is therefore necessary to ensure a more effective and coherent application of the Union resolution framework and to ensure that it can be applied whenever that is in the public interest, including for certain smaller and medium-sized institutions.

Or. en

Amendment 40

Pedro Marques, René Repasi, Aurore Lalucq

Proposal for a directive

Recital 2

Text proposed by the Commission

Amendment

(2) Several years into its implementation, the Union resolution framework as currently applicable does not deliver as intended with respect of some of those objectives. In particular, while institutions and entities have made significant progress towards resolvability and have dedicated significant resources to that end, in particular through the build-up of the loss absorption and recapitalisation capacity and the filling-up of resolution financing arrangements, the Union resolution framework is seldom resorted to. Failures of certain smaller and medium-sized institutions and entities are instead mostly addressed through unharmonised national measures. Regrettably, taxpayer money is still used rather than industry-funded safety nets, including resolution financing arrangements. That situation appears to arise from inadequate incentives. Those inadequate incentives result from the interplay of the Union resolution framework with national rules, whereby the broad discretion in the public interest assessment is not always exercised in a way that reflects how the Union resolution framework was intended to apply. At the same time, the Union resolution framework saw little use due to the risks for depositors of deposit-funded institutions to bear losses to ensure that those institutions can access external funding in resolution, in particular in the absence of other bail-inable liabilities. Finally, the fact that there are less stringent rules on access to funding outside resolution than in resolution has discouraged the application of the Union resolution framework in favour of other solutions, which often entail the use of taxpayers’ money instead of the own resources of the institution and entity or industry-funded safety nets. That situation, in turn, generates risks of fragmentation, risks of suboptimal outcomes in managing institutions and entities’ failures, in particular in the case of smaller and medium-sized institutions and entities, and opportunity costs from unused financial resources. It is therefore necessary to ensure a more effective and coherent application of the Union resolution framework and to ensure that it can be applied when that is in the public interest, including for certain smaller and medium-sized institutions primarily funded through deposits and falling short of the sufficient amount of bail-inable liabilities.

Or. en

Amendment 41

Gilles Boyer, Stéphanie Yon-Courtin

Proposal for a directive

Recital 2

Text proposed by the Commission

Amendment

(2) Several years into its implementation, the Union resolution framework as currently applicable does not deliver as intended with respect of some of those objectives. In particular, while institutions and entities have made significant progress towards resolvability and have dedicated significant resources to that end, in particular through the build-up of the loss absorption and recapitalisation capacity and the filling-up of resolution financing arrangements, the Union resolution framework is seldom resorted to. Failures of certain smaller and medium-sized institutions and entities are instead mostly addressed through unharmonised national measures. External resources, be it industry funds or taxpayer money is used rather than internal loss absorption. That situation appears to arise from inadequate incentives and loopholes. Those inadequate incentives result from the interplay of the Union resolution framework with national rules, whereby the broad discretion in the public interest assessment is not always exercised in a way that reflects how the Union resolution framework was intended to apply. At the same time, the Union resolution framework saw little use due to the risks for depositors of deposit-funded institutions to bear losses to ensure that those institutions can access external funding in resolution, in particular in the absence of other bail-inable liabilities. Finally, the fact that there are less stringent rules on access to funding outside resolution than in resolution has discouraged the application of the Union resolution framework in favour of other solutions, which often entail the use of external resources like taxpayers’ money instead of the own resources of the institution and entity. That situation, in turn, generates risks of fragmentation, risks of suboptimal outcomes in managing institutions and entities’ failures, in particular in the case of smaller and medium-sized institutions and entities. It is therefore necessary to ensure a more effective and coherent application of the Union resolution framework and to ensure that it can be applied whenever that is in the public interest, including for certain smaller and medium-sized institutions primarily funded through deposits.

Or. en

Justification

It is necessary to clearly explain the reasons why the current framework is not optimal and needs reform. In particular is it important to clearly acknowledge the role of DGS interventions - which is not the state budget -in the circumvention of resolution and burden sharing

Amendment 42

Luděk Niedermayer

Proposal for a directive

Recital 2 a (new)

Text proposed by the Commission

Amendment

(2a) The objective of this Directive is to better safeguard taxpayers’ money and establish mechanisms for addressing situations of potential insolvency of some institutions and entities not covered by the existing resolution framework. That framework is designed to curtail the economic burden on society by reducing the overall costs associated with bank failures. The use of taxpayers’ money should, with the introduction of a new framework, be significantly reduced in order to ensure that the resolution financing arrangement is more often and more effectively used.

Or. en

Amendment 43

Pedro Marques, René Repasi, Aurore Lalucq, Jonás Fernández

Proposal for a directive

Recital 2 a (new)

Text proposed by the Commission

Amendment

(2a) The current legislative review seeks to reinforce the conditions for an orderly bank resolution that provides more protection for depositors. It firmly upholds the insurance to covered deposits, while reinforcing the policy toolbox for resolution, thus allowing for smoother alternatives that provide additional safeguards to depositors and financial stability.

Or. en

Amendment 44

Pedro Marques, René Repasi, Aurore Lalucq, Jonás Fernández

Proposal for a directive

Recital 3

Text proposed by the Commission

Amendment

(3) The intensity, and level of detail, of the resolution planning work needed with respect to subsidiaries that have not been identified as resolution entities varies depending on the size and risk profile of the institutions and entities concerned, the presence of critical functions, and the group resolution strategy. Resolution authorities should therefore be able to consider those factors when identifying the measures to be taken in respect of such subsidiaries and follow a simplified approach where appropriate.

Or. en

Amendment 45

Pedro Marques, René Repasi, Aurore Lalucq, Jonás Fernández

Proposal for a directive

Recital 8

Text proposed by the Commission

Amendment

(8) It is necessary to ensure timely action and early coordination between the competent authority and the resolution authority, when an institution or entity is still a going concern, but where there is a material risk that the institution or entity may fail. The competent authority should therefore notify the resolution authority as early as possible of such risk. That notification should contain the reasons for the competent authority’s assessment and an overview of the alternative private sector measures, supervisory action or early intervention measures that are available to prevent the failure of the institution or entity within a reasonable timeframe. Such early notification should not prejudice the procedures to determine whether the conditions for resolution are met. The prior notification by the competent authority to the resolution authority of a material risk that an institution or entity is failing or likely to fail should not be a condition for a subsequent determination that an institution or entity is actually failing or likely to fail. Moreover, if at a later stage the institution or entity is assessed to be failing or likely to fail and there are no alternative solutions to prevent such failure within a reasonable timeframe, the resolution authority has to take a decision whether to take resolution action. In such a case, the timeliness of the decision to apply resolution action to an institution or entity can be fundamental to the successful implementation of the resolution strategy, in particular because an earlier intervention in the institution or entity can contribute to ensuring sufficient levels of loss absorption capacity and liquidity to execute that strategy. It is therefore appropriate to enable the resolution authority to assess, in close cooperation with the competent authority, what constitutes a reasonable timeframe to implement alternative measures to avoid the failure of the institution or entity. To ensure a timely outcome and to enable the resolution authority to prepare properly for the potential resolution of the institution or entity, the resolution authority and the competent authority should meet regularly, and the resolution authority should decide on frequency of those meetings considering the circumstances of the case.

(8) It is necessary to ensure timely action and early coordination between the competent authority and the resolution authority, when an institution or entity is still a going concern, but where there is a material risk that the institution or entity may fail. The competent authority should therefore notify the resolution authority as early as possible of such risk. That notification should contain the reasons for the competent authority’s assessment and an overview of the alternative private sector measures, supervisory action or early intervention measures that are available to prevent the failure of the institution or entity within a reasonable timeframe. Such early notification should not prejudice the procedures to determine whether the conditions for resolution are met. The prior notification by the competent authority to the resolution authority of a material risk that an institution or entity is failing or likely to fail, or the end of the defined timeframe for the implementation of the measures to address such material risk of failure of the institution or entity should not be a condition for, nor imply, a subsequent determination that an institution or entity is actually failing or likely to fail. Moreover, if at a later stage the institution or entity is assessed to be failing or likely to fail and there are no alternative solutions to prevent such failure within a reasonable timeframe, the resolution authority has to take a decision whether to take resolution action. In such a case, the timeliness of the decision to apply resolution action to an institution or entity can be fundamental to the successful implementation of the resolution strategy, in particular because an earlier intervention in the institution or entity can contribute to ensuring sufficient levels of loss absorption capacity and liquidity to execute that strategy. It is therefore appropriate to enable the resolution authority to assess, in close cooperation with the competent authority, what constitutes a reasonable timeframe to implement alternative measures to avoid the failure of the institution or entity. To ensure a timely outcome and to enable the resolution authority to prepare properly for the potential resolution of the institution or entity, the resolution authority and the competent authority should meet regularly, and the resolution authority should decide on frequency of those meetings considering the circumstances of the case.

Or. en

Amendment 46

Luděk Niedermayer

Proposal for a directive

Recital 9

Text proposed by the Commission

Amendment

(9) The resolution framework is meant to be applied to potentially any institution or entity, irrespective of its size and business model, if the tools available under national law are not adequate to manage its failure. To ensure such outcome, the criteria to apply the public interest assessment to a failing institution or entity should be specified. In particular, it is necessary to clarify that, depending on the specific circumstances, certain functions of the institution or entity can be considered critical even if their discontinuance would impact financial stability or critical services only at regional. To ensure that the assessment of the impact at a regional level can be based on data that is available in a consistent way across the Union, regional level should be understood with reference to the level 1 or the level 2 territorial units of the Nomenclature of territorial units for statistics (NUTS level 1 or 2) within the meaning of Regulation (EC) No 1059/2003 of the European Parliament and of the Council*;

* Regulation (EC) No 1059/2003 of the European Parliament and of the Council of 26 May 2003 on the establishment of a common classification of territorial units for statistics (NUTS) (OJ L 154, 21.6.2003, p. 1).

Or. en

Amendment 47

Martin Schirdewan

Proposal for a directive

Recital 9

Text proposed by the Commission

Amendment

(9) The resolution framework is meant to be applied to certain institutions, if the tools available under national law are not adequate to manage its failure.

Or. en

Amendment 48

Herbert Dorfmann, Othmar Karas

Proposal for a directive

Recital 9

Text proposed by the Commission

Amendment

(9) The resolution framework is meant to be applied to potentially any institution or entity, irrespective of its size and business model, if the tools available under national law are not adequate to manage its failure and unless the institution is member to an Institutional Protection Scheme which provides for adequate measures to prevent or remedy failure. To ensure such outcome, the criteria to apply the public interest assessment to a failing institution or entity should be specified. In particular, it is necessary to clarify that, depending on the specific circumstances, certain functions of the institution or entity can be considered critical even if their discontinuance would impact critical services only at regional level when there is a risk that the discontinuance will eventually cause a systemic crisis.

Or. en

Justification

If an institution is member to an IPS this will usually be a sufficient safeguard for the resolution objectives so that there is no need to earmark these institutions for resolution. Financial stability as such can hardly be impacted at a regional level only. What should be taken care of instead are impairments of critical functions at a regional level that are eventually likely to result in a systemic crisis (as defined in Art. 2 (1) no. 30 BRRD).

Amendment 49

Engin Eroglu

Proposal for a directive

Recital 9

Text proposed by the Commission

Amendment

(9) The resolution framework is meant to be applied to potentially any institution or entity, irrespective of its size and business model, if the tools available under national law are not adequate to manage its failure. To ensure such outcome, the criteria to apply the public interest assessment to a failing institution or entity should be specified. In particular, it is necessary to clarify that, depending on the specific circumstances, certain functions of the institution or entity can be considered critical even if their discontinuance would impact financial stability or critical services only at regional level. This is to be distinguished from impacts at the local level only, such as cities, municipalities, counties or districts, as this hardly implies risks for financial stability.

Or. en

Justification

It is not apparent that FOLTFs at a purely local level endanger financial stability to such an extent that the use of resolution tools appears justified. Rather, these are regularly smaller institutions whose business can be substituted.

Amendment 50

Markus Ferber

Proposal for a directive

Recital 9

Text proposed by the Commission

Amendment

(9) The resolution framework is meant to be applied to potentially any institution or entity, if the tools available under national law are not adequate to manage its failure. To ensure such outcome, the criteria to apply the public interest assessment to a failing institution or entity should be specified. In particular, it is necessary to clarify that, depending on the specific circumstances, certain functions of the institution or entity can be considered critical if their discontinuance would impact financial stability or critical services.

Or. en

Amendment 51

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Recital 9

Text proposed by the Commission

Amendment

Or. en

Amendment 52

Pedro Marques, René Repasi, Aurore Lalucq, Jonás Fernández

Proposal for a directive

Recital 9

Text proposed by the Commission

Amendment

(9) The resolution framework is meant to be applied to manage the failure of any institution or entity that has a positive public interest assessment, in particular when the tools available under national law are not adequate. To ensure such outcome, the criteria to apply the public interest assessment to any failing institution or entity should be specified. In particular, it is necessary to clarify that, depending on the specific circumstances, certain functions of the institution or entity can be considered critical even if their discontinuance would impact financial stability or critical services only at regional level.

Or. en

Amendment 53

Eero Heinäluoma

Proposal for a directive

Recital 10

Text proposed by the Commission

Amendment

(10) The assessment of whether the resolution of an institution or entity is in the public interest should reflect the consideration that depositors are better protected when deposit guarantee scheme (‘DGS’) funds are used more efficiently and the losses for those funds are minimised. Therefore, in the public interest assessment, the resolution objective of protecting depositors should be considered better achieved in resolution if opting for insolvency would be more costly for the DGS.

deleted

Or. en

Amendment 54

Marco Zanni, Valentino Grant, Antonio Maria Rinaldi

Proposal for a directive

Recital 10

Text proposed by the Commission

Amendment

deleted

Or. en

Amendment 55

Irene Tinagli

Proposal for a directive

Recital 10

Text proposed by the Commission

Amendment

deleted

Or. en

Amendment 56

Markus Ferber, Herbert Dorfmann

Proposal for a directive

Recital 10

Text proposed by the Commission

Amendment

deleted

Or. en

Amendment 57

Pedro Marques, René Repasi, Aurore Lalucq, Jonás Fernández

Proposal for a directive

Recital 10

Text proposed by the Commission

Amendment

(10) The assessment of whether the resolution of an institution or entity is in the public interest should reflect, among other factors, the consideration that depositors are better protected when deposit guarantee scheme (‘DGS’) funds are used more efficiently and the losses for those funds are minimised. Therefore, in the public interest assessment, protection of depositors should be considered better achieved in resolution if opting for insolvency would be more or equally costly for the DGS.

Or. en

Amendment 58

Engin Eroglu

Proposal for a directive

Recital 10

Text proposed by the Commission

Amendment

(10) The assessment of whether the resolution of an institution or entity is in the public interest should reflect the consideration that depositors are better protected when deposit guarantee scheme (‘DGS’) funds are used more efficiently and the losses for those funds are minimised. Therefore, in the public interest assessment, the resolution objective of protecting covered depositors should be considered better achieved in resolution if opting for insolvency would be more costly for the DGS.

Or. en

Justification

There is no need to acknowledge all kinds of deposits in the public interest assessment. For example, large companies or, in the future, government bodies, do not require any protection that would be granted to them with the general depositor preference. On the contrary, the single-tier treatment is likely to create moral hazard on the depositor side. For these reasons a special treatment of all deposits is not justified and should therefore be based on covered deposits.

Amendment 59

Roberts Zīle

Proposal for a directive

Recital 10 a (new)

Text proposed by the Commission

Amendment

(10a) Where national insolvency and resolution frameworks achieve effectively the objectives of the framework in a comparable manner, preference should be given to the option that minimises the risk for taxpayers and the economy. That approach ensures a prudent and responsible course of action, aligned with the overarching goal of safeguarding both the interests of taxpayers and the broader economic stability.

Or. en

Amendment 60

Gilles Boyer, Stéphanie Yon-Courtin

Proposal for a directive

Recital 11

Text proposed by the Commission

Amendment

(11) The assessment of whether the resolution of an institution or entity is in the public interest should also reflect, to the extent possible, the difference between, on the one hand, funding provided through industry-funded safety nets (resolution financing arrangements or DGSs) and, on the other hand, funding provided by Member States from taxpayers’ money. Funding provided by Member States bears a higher risk of moral hazard and a lower incentive for market discipline. Therefore, when assessing the objective of minimising reliance on extraordinary public financial support, resolution authorities should find funding through the resolution financing arrangements or the DGS preferable to funding through an equal amount of resources from the budget of Member States.

deleted

Or. en

Justification

Deletion because the text invites greater recourse to external bail-out by way of industry safety nets, on the unsubstantiated grounds that it would produce less moral hazard than interventions using the state budget.

Amendment 61

Fabio Massimo Castaldo

Proposal for a directive

Recital 11

Text proposed by the Commission

Amendment

(11) The assessment of whether the resolution of an institution or entity is in the public interest should also reflect, to the extent possible, the difference between, on the one hand, funding provided through industry-funded safety nets (resolution financing arrangements or DGSs) and, on the other hand, funding provided by Member States from taxpayers’ money. Funding provided by Member States bears a higher risk of moral hazard and a lower incentive for market discipline. As the public interest assessment is an ad hoc decision, it also lacks transparency and has negative consequences for the level playing field in the internal market. Therefore, when assessing the objective of minimising reliance on extraordinary public financial support, resolution authorities should find funding through the resolution financing arrangements or the DGS preferable and funding through an equal amount of resources from the budget of Member States should be considered only under extraordinary circumstances.

Or. en

Amendment 62

Marco Zanni, Valentino Grant, Antonio Maria Rinaldi

Proposal for a directive

Recital 11

Text proposed by the Commission

Amendment

(11) The assessment of whether the resolution of an institution or entity is in the public interest should also reflect, to the extent possible, the difference between, on the one hand, funding provided through industry-funded safety nets (resolution financing arrangements or DGSs) and, on the other hand, funding provided by Member States from taxpayers’ money. Funding provided by Member States bears a higher risk of moral hazard and a lower incentive for market discipline. As the public interest assessment is an ad hoc decision, it also lacks transparency and has negative consequences for the level playing field in the internal market. Therefore, when assessing the objective of minimising reliance on extraordinary public financial support, resolution authorities should find funding through the resolution financing arrangements or the DGS preferable and funding through an equal amount of resources from the budget of Member States.

Or. en

Amendment 63

Pedro Marques, René Repasi, Aurore Lalucq, Irene Tinagli

Proposal for a directive

Recital 11

Text proposed by the Commission

Amendment

(11) The assessment of whether the resolution of an institution or entity is in the public interest should also reflect the prioritisation of using industry-funded safety nets (resolution financing arrangements or deposit guarantee schemes) instead of funding provided by Member States from taxpayers’ money. Funding provided by Member States bears a higher risk of moral hazard and a lower incentive for market discipline. Therefore, when assessing the objective of minimising reliance on extraordinary public financial support, the Single Resolution Board or the resolution authorities should find funding through the resolution financing arrangements or the deposit guarantee scheme, preferable to funding through an equal amount of resources from the budget of Member States. For these purposes, funds provided by industry-funded safety nets shall not be considered as funds provided from the budget of a Member State.

Or. en

Amendment 64

Markus Ferber, Herbert Dorfmann

Proposal for a directive

Recital 11

Text proposed by the Commission

Amendment

(11) The assessment of whether the resolution of an institution or entity is in the public interest should also reflect, to the extent possible, the difference between, on the one hand, funding provided through industry-funded safety nets (resolution financing arrangements or DGSs) and, on the other hand, funding provided by Member States from taxpayers’ money. Therefore, when assessing the objective of minimising reliance on extraordinary public financial support, resolution authorities should find funding through the resolution financing arrangements or the DGS preferable to funding through an equal amount of resources from the budget of Member States. However, this should not lead to expectation that burden sharing requirements will be reduced as burden sharing by shareholders and creditors should remain primary source of funding.

Or. en

Amendment 65

Engin Eroglu

Proposal for a directive

Recital 11

Text proposed by the Commission

Amendment

(11) The assessment of whether the resolution of an institution or entity is in the public interest should also reflect, to the extent possible, the difference between, on the one hand, funding provided through industry-funded safety nets (resolution financing arrangements or DGSs) and, on the other hand, funding provided by Member States from taxpayers’ money. Therefore, when assessing the objective of minimising reliance on extraordinary public financial support, resolution authorities should find funding through the resolution financing arrangements or the DGS preferable to funding through an equal amount of resources from the budget of Member States. Nevertheless, burden sharing by shareholders and creditors must remain the primary source of funding.

Or. en

Amendment 66

Luděk Niedermayer

Proposal for a directive

Recital 11 a (new)

Text proposed by the Commission

Amendment

(11a) Extraordinary public financial support to institutions and entities provided by Member States from taxpayers’ money or other State resources should be granted, if at all, only in extraordinary circumstances of a systemic nature or pertaining to very large economic turmoil, as it imposes a significant burden on public finances and disrupts the level playing field in the internal market.

Or. en

Amendment 67

Irene Tinagli

Proposal for a directive

Recital 12

Text proposed by the Commission

Amendment

(12) To ensure that the resolution objectives are attained in the most effective way, the outcome of the public interest assessment should be negative only where the winding up of the failing institution or entity under normal insolvency proceedings would achieve the resolution objectives more effectively and not only to the same extent as resolution.

deleted

Or. en

Amendment 68

Marco Zanni, Valentino Grant, Antonio Maria Rinaldi

Proposal for a directive

Recital 12

Text proposed by the Commission

Amendment

deleted

Or. en

Amendment 69

Eero Heinäluoma

Proposal for a directive

Recital 12

Text proposed by the Commission

Amendment

deleted

Or. en

Amendment 70

Pedro Marques, René Repasi, Aurore Lalucq, Jonás Fernández

Proposal for a directive

Recital 12

Text proposed by the Commission

Amendment

(12) To ensure that the resolution objectives are attained in the most effective way, the public interest assessment should consider whether the winding up of the failing institution or entity under normal insolvency proceedings would achieve the resolution objectives more effectively than resolution, and not only to the same extent. The assessment should include costs related to DGS payouts, such as the duration required for asset recovery and the income lost during the process.

Or. en

Amendment 71

Herbert Dorfmann, Othmar Karas

Proposal for a directive

Recital 12

Text proposed by the Commission

Amendment

(12) To ensure that the resolution objectives are attained in the most effective way, the outcome of the public interest assessment should be negative where the winding up of the failing institution or entity under normal insolvency proceedings would achieve the resolution objectives to the same extent as resolution.

Or. en

Justification

There is no apparent reason why, of two options that equally achieve the settlement objectives, one option should always be eliminated. This also seems arbitrary from a legal point of view, which a legislator has to consider.

Amendment 72

Engin Eroglu

Proposal for a directive

Recital 12

Text proposed by the Commission

Amendment

Or. en

Justification

There is no reason why, winding up under normal insolvency proceedings should only be possible, if it would be more effective than resolution. This also seems arbitrary from a legal point of view, which should be considered.

Amendment 73

Markus Ferber

Proposal for a directive

Recital 12

Text proposed by the Commission

Amendment

Or. en

Amendment 74

Joachim Schuster

Proposal for a directive

Recital 12

Text proposed by the Commission

Amendment

Or. en

Amendment 75

Engin Eroglu

Proposal for a directive

Recital 12 a (new)

Text proposed by the Commission

Amendment

(12a) All changes in connection with the public interest assessment are only intended to enable resolution authorities to apply the resolution tools to medium-sized or smaller institutions in a specific individual case and if there are exceptional circumstances. Resolution authorities should not be forced to apply resolution tools to the bulk of these institutions.

Or. en

Justification

To avoid the misunderstanding that all medium-sized and smaller institutions are now to be earmarked for resolution, this clarification is essential. The resolution authorities should only be given the possibility to consider this option – only in case of serious circumstances.

Amendment 76

Roberts Zīle

Proposal for a directive

Recital 16

Text proposed by the Commission

Amendment

(16) Competent authorities should be empowered to withdraw the authorisation of an institution or entity solely on the basis of the fact that the institution or entity is failing or likely to fail and is not put in resolution. Competent authorities should be able to withdraw the authorisation to support the objective of winding up the institution or entity in accordance with national law, particularly in cases where the available procedures under national law cannot be initiated at the moment the institution or entity is determined to be failing or likely to fail, including the cases where the institution or entity is not yet balance sheet insolvent. To further ensure that the objective of winding up the institution or entity can be achieved, Member States should ensure that the withdrawal of the authorisation by the competent authority is also included among the possible conditions to initiate at least one of the procedures available under national law and applicable to institutions or entities that are failing or likely to fail but are not put in resolution.

(16) Competent authorities should be empowered to withdraw the authorisation of an institution or entity solely on the basis of the fact that the institution or entity is failing or likely to fail, there are no alternatives to prevent the failure and is not put in resolution. Competent authorities should be able to withdraw the authorisation to support the objective of winding up the institution or entity in accordance with national law, particularly in cases where the available procedures under national law cannot be initiated at the moment the institution or entity is determined to be failing or likely to fail, including the cases where the institution or entity is not yet balance sheet insolvent. To further ensure that the objective of winding up the institution or entity can be achieved, Member States should ensure that the withdrawal of the authorisation by the competent authority is also included among the possible conditions to initiate at least one of the procedures available under national law and applicable to institutions or entities that are failing or likely to fail but are not put in resolution.

Or. en

Amendment 77

Engin Eroglu

Proposal for a directive

Recital 17

Text proposed by the Commission

Amendment

(17) In light of the experience acquired in the implementation of Directive 2014/59/EU, Regulation (EU) No 806/2014 and Directive 2014/49/EU of the European Parliament and of the Council31 , it is necessary to specify further the conditions under which measures of a preventive precautionary nature that qualify as extraordinary public financial support may exceptionally be granted. To minimise distortions of competition arising from differences in nature of DGSs in the Union, interventions of DGSs in the context of preventive measures complying with Directive 2014/49/EU that qualify as extraordinary public financial support should exceptionally be allowed where the beneficiary institution or entity does not meet any of the conditions for being deemed as failing or likely to fail. It should be ensured that precautionary measures are taken sufficiently early. The European Central Bank (ECB) currently bases its consideration that an institution or entity is solvent, for the purposes of precautionary recapitalisation, on a forward-looking assessment for following 12 months of whether the institution or entity can comply with the own funds requirements set out in Regulation (EU) No 575/2013 of the European Parliament and of the Council32 or in Regulation (EU) 2019/2033 of the European Parliament and of the Council33 , and the additional own funds requirement laid down in Directive 2013/36/EU or Directive (EU) 2019/2034. That practice should be laid down in Directive 2014/59/EU. Moreover, measures to provide relief for impaired assets, including asset management vehicles or asset guarantee schemes, can prove effective and efficient in addressing causes of possible financial distresses faced by institutions and entities and preventing their failure and could therefore constitute relevant precautionary measures. It should be therefore specified that such precautionary measures can take the form of impaired asset measures.

(17) In light of the experience acquired in the implementation of Directive 2014/59/EU, Regulation (EU) No 806/2014 and Directive 2014/49/EU of the European Parliament and of the Council and without prejudice to the question whether a preventive measure constitutes extraordinary public financial support in the first place, it is necessary to specify further the conditions under which measures of a preventive precautionary nature that qualify as extraordinary public financial support may exceptionally be granted. To minimise distortions of competition arising from differences in nature of DGSs in the Union, interventions of DGSs in the context of preventive measures complying with Directive 2014/49/EU that qualify as extraordinary public financial support should exceptionally be allowed where the beneficiary institution or entity does not meet any of the conditions for being deemed as failing or likely to fail. It should be ensured that precautionary measures are taken sufficiently early. The European Central Bank (ECB) currently bases its consideration that an institution or entity is solvent, for the purposes of precautionary recapitalisation, on a forward-looking assessment for following 12 months of whether the institution or entity can comply with the own funds requirements set out in Regulation (EU) No 575/2013 of the European Parliament and of the Council32 or in Regulation (EU) 2019/2033 of the European Parliament and of the Council33 , and the additional own funds requirement laid down in Directive 2013/36/EU or Directive (EU) 2019/2034. That practice should be laid down in Directive 2014/59/EU. Moreover, measures to provide relief for impaired assets, including asset management vehicles or asset guarantee schemes, can prove effective and efficient in addressing causes of possible financial distresses faced by institutions and entities and preventing their failure and could therefore constitute relevant precautionary measures. It should be therefore specified that such precautionary measures can take the form of impaired asset measures.

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31 Directive 2014/49/EU of the European Parliament and of the Council of 16 April 2014 on deposit guarantee schemes (OJ L 173, 12.6.2014, p. 149).

32 Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (OJ L 176, 27.6.2013, p. 1).

33 Regulation (EU) 2019/2033 of the European Parliament and of the Council of 27 November 2019 on the prudential requirements of investment firms and amending Regulations (EU) No 1093/2010, (EU) No 575/2013, (EU) No 600/2014 and (EU) No 806/2014 (OJ L 314, 5.12.2019, p. 1).

Or. en

Justification

It should be made clear that none of the newly introduced rules on state aid, in particular Art. 32c of the draft BRRD, is intended to classify precautionary measures per se as state aid. It should therefore be made clear that this question remains unaffected.

Amendment 78

Marco Zanni, Valentino Grant, Antonio Maria Rinaldi

Proposal for a directive

Recital 17

Text proposed by the Commission

Amendment

(17) In light of the experience acquired in the implementation of Directive 2014/59/EU, Regulation (EU) No 806/2014 and Directive 2014/49/EU of the European Parliament and of the Council, it is necessary to specify further the conditions under which measures of a preventive precautionary nature that qualify as extraordinary public financial support may exceptionally be granted. To minimise distortions of competition arising from differences in nature of DGSs in the Union, interventions of DGSs in the context of preventive measures complying with Directive 2014/49/EU that qualify as extraordinary public financial support should exceptionally be allowed where the beneficiary institution or entity has been not declared failing or likely to fail. It should be ensured that precautionary measures are taken sufficiently early. The European Central Bank (ECB) currently bases its consideration that an institution or entity is solvent, for the purposes of precautionary recapitalisation, on a forward-looking assessment for following 12 months of whether the institution or entity can comply with the own funds requirements set out in Regulation (EU) No 575/2013 of the European Parliament and of the Council or in Regulation (EU) 2019/2033 of the European Parliament and of the Council, and the additional own funds requirement laid down in Directive 2013/36/EU or Directive (EU) 2019/2034. That practice should be revised in Directive 2014/59/EU. Moreover, measures to provide relief for impaired assets, including asset management vehicles or asset guarantee schemes, can prove effective and efficient in addressing causes of possible financial distresses faced by institutions and entities and preventing their failure and could therefore constitute relevant precautionary measures. It should be therefore specified that such precautionary measures can take the form of impaired asset measures.

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31 Directive 2014/49/EU of the European Parliament and of the Council of 16 April 2014 on deposit guarantee schemes (OJ L 173, 12.6.2014, p. 149).

Or. en

Amendment 79

Irene Tinagli

Proposal for a directive

Recital 17

Text proposed by the Commission

Amendment

(17) In light of the experience acquired in the implementation of Directive 2014/59/EU, Regulation (EU) No 806/2014 and Directive 2014/49/EU of the European Parliament and of the Council31 , it is necessary to specify further the conditions under which measures of a preventive precautionary nature that qualify as extraordinary public financial support may exceptionally be granted. To minimise distortions of competition arising from differences in nature of DGSs in the Union, interventions of DGSs in the context of preventive measures complying with Directive 2014/49/EU that qualify as extraordinary public financial support should exceptionally be allowed where the beneficiary institution or entity has been not declared failing or likely to fail. It should be ensured that precautionary measures are taken sufficiently early. The European Central Bank (ECB) currently bases its consideration that an institution or entity is solvent, for the purposes of precautionary recapitalisation, on a forward-looking assessment for following 12 months of whether the institution or entity can comply with the own funds requirements set out in Regulation (EU) No 575/2013 of the European Parliament and of the Council32 or in Regulation (EU) 2019/2033 of the European Parliament and of the Council33 , and the additional own funds requirement laid down in Directive 2013/36/EU or Directive (EU) 2019/2034. That practice should be revised in Directive 2014/59/EU. Moreover, measures to provide relief for impaired assets, including asset management vehicles or asset guarantee schemes, can prove effective and efficient in addressing causes of possible financial distresses faced by institutions and entities and preventing their failure and could therefore constitute relevant precautionary measures. It should be therefore specified that such precautionary measures can take the form of impaired asset measures.

__________________

31 Directive 2014/49/EU of the European Parliament and of the Council of 16 April 2014 on deposit guarantee schemes (OJ L 173, 12.6.2014, p. 149).

Or. en

Amendment 80

Marco Zanni, Valentino Grant, Antonio Maria Rinaldi

Proposal for a directive

Recital 18

Text proposed by the Commission

Amendment

(18) To preserve market discipline, protect public funds and avoid distortions of competition, precautionary measures should remain the exception and only be applied to address situations of serious disturbance in the market or to preserve financial stability. Moreover, precautionary measures should not be used to address incurred or likely losses. The most reliable instrument to identify incurred or likely to be incurred losses is an asset quality review by the ECB, the European Supervisory Authority (European Banking Authority) (EBA), established by Regulation (EU) No 1093/2010 of the European Parliament and of the Council34 or national competent authorities. Competent authorities should use such a review to identify incurred or likely to be incurred losses where such review can be carried out within a reasonable timeframe. Where that is not possible, competent authorities should identify incurred or likely to be incurred losses in the most reliable way possible under the prevailing circumstances, based on on-site inspections where appropriate.

(18) To preserve market discipline, protect public funds and avoid distortions of competition, precautionary measures should remain the exception and only be applied to address situations of serious disturbance in the market or to preserve financial stability. Moreover, precautionary measures should not be used to address incurred or likely losses unless an exception to the burden-sharing requirement is made under Union State aid framework. The most reliable instrument to identify incurred or likely to be incurred losses is an asset quality review by the ECB, the European Supervisory Authority (European Banking Authority) (EBA), established by Regulation (EU) No 1093/2010 of the European Parliament and of the Council34 or national competent authorities. Competent authorities should use such a review to identify incurred or likely to be incurred losses where such review can be carried out within a reasonable timeframe. Where that is not possible, competent authorities should identify incurred or likely to be incurred losses in the most reliable way possible under the prevailing circumstances, based on on-site inspections where appropriate.

__________________

34 Regulation (EU) No 1093/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Banking Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/78/EC (OJ L 331, 15.12.2010, p. 12).

Or. en

Amendment 81

Irene Tinagli

Proposal for a directive

Recital 18

Text proposed by the Commission

Amendment

(18) To preserve market discipline, protect public funds and avoid distortions of competition, precautionary measures should remain the exception and only be applied to address situations of serious disturbance in the market or to preserve financial stability. Moreover, precautionary measures should not be used to address incurred or likely losses unless the Union State aid framework allows for an exception to the burden-sharing requirement. The most reliable instrument to identify incurred or likely to be incurred losses is an asset quality review by the ECB, the European Supervisory Authority (European Banking Authority) (EBA), established by Regulation (EU) No 1093/2010 of the European Parliament and of the Council34 or national competent authorities. Competent authorities should use such a review to identify incurred or likely to be incurred losses where such review can be carried out within a reasonable timeframe. Where that is not possible, competent authorities should identify incurred or likely to be incurred losses in the most reliable way possible under the prevailing circumstances, based on on-site inspections where appropriate.

__________________

Or. en

Amendment 82

Pedro Marques, René Repasi, Aurore Lalucq, Irene Tinagli

Proposal for a directive

Recital 18

Text proposed by the Commission

Amendment

(18) To preserve market discipline, protect public funds and avoid distortions of competition, precautionary measures should remain the exception and only be applied to address situations of serious disturbance in the market or to preserve financial stability, in particular in the event of a systemic crisis. Moreover, precautionary measures should not be used to address incurred or likely losses. The most reliable instrument to identify incurred or likely to be incurred losses is an asset quality review by the ECB, the European Supervisory Authority (European Banking Authority) (EBA), established by Regulation (EU) No 1093/2010 of the European Parliament and of the Council34 or national competent authorities. Competent authorities should use such a review to identify incurred or likely to be incurred losses where such review can be carried out within a reasonable timeframe. Where that is not possible, competent authorities should identify incurred or likely to be incurred losses in the most reliable way possible under the prevailing circumstances, based on on-site inspections where appropriate.

__________________

Or. en

Amendment 83

Marco Zanni, Valentino Grant, Antonio Maria Rinaldi

Proposal for a directive

Recital 19

Text proposed by the Commission

Amendment

(19) Precautionary recapitalisation is aimed at supporting viable institutions and entities identified as likely to encounter temporary difficulties in the near future and to prevent their situation from deteriorating further. To avoid that public subsidies are granted to businesses that are already unprofitable when the support is granted, precautionary measures granted in the form of acquisition of own funds instruments or other capital instruments or through impaired asset measures should not exceed the amount necessary to cover capital shortfalls as identified in the adverse scenario of a stress test or equivalent exercise. To ensure that public financing is ultimately discontinued, those precautionary measures should also be limited in time and contain a clear timeline for their termination (exit strategy). Perpetual instruments, including Common Equity Tier 1 capital, should only be used in exceptional circumstances and be subject to certain quantitative limits because by their nature they are not well suited for compliance with the condition of temporariness.

Or. en

Amendment 84

Pedro Marques, René Repasi, Aurore Lalucq, Irene Tinagli, Jonás Fernández

Proposal for a directive

Recital 19

Text proposed by the Commission

Amendment

Or. en

Amendment 85

Marco Zanni, Valentino Grant, Antonio Maria Rinaldi

Proposal for a directive

Recital 20

Text proposed by the Commission

Amendment

(20) Precautionary measures should be limited to the amount that the institution or entity would need to maintain its solvency in the case of an adverse scenario event as determined in a stress test or equivalent exercise. In the case of precautionary measures in the form of impaired asset measures, the receiving institution or entity should be able to use that amount to cover losses on the transferred assets or in combination with an acquisition of capital instruments, provided that the overall amount of the shortfall identified is not exceeded. It is also necessary to ensure that such precautionary measures in the form of impaired asset measures comply with existing State aid rules and best practices, that they restore the institution or entity's long-term viability, that State aid is limited to the minimum necessary and that distortions of competition are avoided. For those reasons, the authorities concerned should in case of precautionary measures in the form of impaired asset measures take into account the specific guidance, including the AMC Blueprint35 and the Communication on Tackling Non-Performing Loans36 . Those precautionary measures in the form of impaired asset measures should always be subject to the overriding condition of temporariness. Public guarantees granted for a specified period in relation to the impaired assets of the institution or entity concerned are expected to ensure better compliance with the temporariness condition than transfers of such assets to a publicly supported entity. To ensure the market exit of institutions and entities that prove not to be viable, despite the support received, it is necessary to lay down that non-compliance by the institution or entity concerned with the terms of the support measures specified at the time such measures were granted is to result in the institution or entity concerned being considered failing or likely to fail.

__________________

35 COM(2018) 133 final.

36 COM(2020) 822 final.

Or. en

Amendment 86

Pedro Marques, René Repasi, Aurore Lalucq, Irene Tinagli, Jonás Fernández

Proposal for a directive

Recital 20

Text proposed by the Commission

Amendment

(20) Precautionary measures should be limited to the amount that the institution or entity would need to maintain its solvency in the case of an adverse scenario event as determined in a stress test or equivalent exercise. In the case of precautionary measures in the form of impaired asset measures, the receiving institution or entity should be able to use that amount to cover losses on the transferred assets or in combination with an acquisition of capital instruments, provided that the overall amount of the shortfall identified is not exceeded. It is also necessary to ensure that such precautionary measures in the form of impaired asset measures comply with existing State aid rules and best practices, that they restore the institution or entity's long-term viability, that State aid is limited to the minimum necessary and that distortions of competition are avoided. For those reasons, the authorities concerned should in case of precautionary measures in the form of impaired asset measures take into account the specific guidance, including the AMC Blueprint35 and the Communication on Tackling Non-Performing Loans36 . Those precautionary measures in the form of impaired asset measures should always be subject to the overriding condition of temporariness. Public guarantees granted for a specified period in relation to the impaired assets of the institution or entity concerned are expected to ensure better compliance with the temporariness condition than transfers of such assets to a publicly supported entity. To ensure that institutions receiving support comply with terms of the support measure, competent authorities should request a remediation plan from institutions that failed to fulfil their commitments. Where a competent authority is of the opinion that the measures in the remediation plan are not capable of achieving the institution’s long-term viability or where the institution failed to comply with the remediation plan, relevant authorities shall carry out an assessment of whether the institution is failing or is likely to fail, in accordance with Article 32 of Directive 2014/59/EU.

__________________

35 COM(2018) 133 final.

36 COM(2020) 822 final.

Or. en

Amendment 87

Gilles Boyer, Stéphanie Yon-Courtin

Proposal for a directive

Recital 26

Text proposed by the Commission

Amendment

(26) In certain circumstances, after the resolution financing arrangement has provided a contribution up to the maximum of 5 % of the institution or entity’s total liabilities including own funds, resolution authorities may use additional sources of funding to further support their resolution action. It should be specified more clearly in which circumstances the resolution financing arrangement may provide further support where all liabilities with a priority ranking lower than deposits that are not mandatorily or discretionarily excluded from bail-in have been written down or converted in full.

deleted

Or. en

Justification

Review of this point not necessary

Amendment 88

Eero Heinäluoma

Proposal for a directive

Recital 26

Text proposed by the Commission

Amendment

Or. en

Amendment 89

Gilles Boyer, Stéphanie Yon-Courtin

Proposal for a directive

Recital 28

Text proposed by the Commission

Amendment

(28) The rules for determining the MREL are mostly focused on setting the appropriate level of the MREL with the assumption of the bail-in tool as the preferred resolution strategy. However, Directive 2014/59/EU allows resolution authorities to use other resolution tools, namely those relying on the transfer of the business of the institution under resolution to a private purchaser or to a bridge institution. It should therefore be specified that, in case the resolution plan envisages the use of the sale of business tool or of the bridge institution tool and the resolution entity’s exit from the market, resolution authorities should determine the level of the MREL for the resolution entity concerned on the basis of the specificities of those resolution tools and of the different loss-absorbing and recapitalisation needs those tools entail.

(28) The rules for determining the MREL are mostly focused on setting the appropriate level of the MREL with the assumption of the bail-in tool as the preferred resolution strategy. However, Directive 2014/59/EU allows resolution authorities to use other resolution tools, namely those relying on the transfer of the business of the institution under resolution to a private purchaser or to a bridge institution, as a standalone tool or in combination with other tools including bail-in. It should therefore be further specified that, in case the resolution plan envisages the use of a combination tool, or the sale of business tool or of the bridge institution tool and the resolution entity’s exit from the market, resolution authorities should always determine the level of the MREL for the resolution entity concerned on the basis of the specificities of those resolution tools and of the different loss-absorbing and recapitalisation needs those tools entail, taking into consideration the reduction in size and complexity that result from the implementation of recovery options in the runup to resolution and the resolution actions.

Or. en

Justification

The principle of adjusting the MREL target to the specificities of the preferred resolution strategy needs to be implemented horizontally for all tools and combination of tools.

Amendment 90

Gilles Boyer, Stéphanie Yon-Courtin

Proposal for a directive

Recital 29

Text proposed by the Commission

Amendment

(29) The level of the MREL for resolution entities is the sum of the amount of the losses expected in resolution and the recapitalisation amount that enable the resolution entity to continue to comply with its conditions for authorisation and enabling it to pursue its activities for the appropriate period. Certain preferred resolution strategies entail the transfer of assets, rights and liabilities to a recipient and market exit, in particular the sale of business tool. In those cases, the objectives pursued by the recapitalisation component might not apply to the same extent, because the resolution authority will not be required to ensure that the resolution entity restores compliance with its own funds requirements after resolution action. Nevertheless, the losses in such cases are expected to exceed the resolution entity’s own funds requirements. It is therefore appropriate to lay down that the level of the MREL of those resolution entities continues to include a recapitalisation amount that is adjusted in a way that is proportionate to the resolution strategy.

(29) The level of the MREL for resolution entities is the sum of the amount of the losses expected in resolution and the recapitalisation amount that enable the post-resolution entity to continue to comply with its conditions for authorisation and enabling it to pursue its activities for the appropriate period. Certain preferred resolution strategies entail the transfer of assets, rights and liabilities to a recipient and market exit, in particular the sale of business tool. In those cases, the objectives pursued by the recapitalisation component might not apply to the same extent, because the resolution authority will not be required to ensure that the resolution entity restores compliance with its own funds requirements after resolution action, although the acquirer might ask for the transaction to be capital neutral. Nevertheless, the losses in such cases are expected to exceed the resolution entity’s own funds requirements. It is therefore appropriate to lay down that the level of the MREL of those resolution entities continues to include a recapitalisation amount that is adjusted in a way that is proportionate to the resolution strategy, and subject to an appropriate floor.

Or. en

Justification

The adjustment of the MREL target for the transfer tool with market exit needs to be sufficiently prudent and robust.

Amendment 91

Marco Zanni, Valentino Grant, Antonio Maria Rinaldi

Proposal for a directive

Recital 29

Text proposed by the Commission

Amendment

(29) The level of the MREL for resolution entities is the sum of the amount of the losses expected in resolution and the recapitalisation amount that enable the resolution entity to continue to comply with its conditions for authorisation and enabling it to pursue its activities for the appropriate period. Certain preferred resolution strategies entail the transfer of assets, rights and liabilities to a recipient and market exit, in particular the sale of business tool. In those cases, the objectives pursued by the recapitalisation component might not apply to the same extent, because the resolution authority will not be required to ensure that the resolution entity restores compliance with its own funds requirements after resolution action. It is therefore appropriate to lay down that the level of the MREL of those resolution entities continues to include a recapitalisation amount that is adjusted in a way that is proportionate to the resolution strategy.

Or. en

Amendment 92

Eero Heinäluoma

Proposal for a directive

Recital 29

Text proposed by the Commission

Amendment

Or. en

Amendment 93

Marco Zanni, Valentino Grant, Antonio Maria Rinaldi

Proposal for a directive

Recital 30

Text proposed by the Commission

Amendment

(30) Where the resolution strategy envisages the use of resolution tools other than bail-in, the recapitalisation needs of the entity concerned will generally be smaller after resolution than in case of open bank bail-in. The calibration of the MREL in such a case should take that aspect into account when estimating the recapitalisation requirement. Therefore, when adjusting the level of the MREL for resolution entities the resolution plan of which envisages the sale of business tool or the bridge institution tool and its exit from the market, resolution authorities should take into account the features of those tools, including the expected perimeter of the transfer to the private purchaser or to the bridge institution, the types of instruments to be transferred, the expected value and marketability of those instruments and the design of the preferred resolution strategy, including the complementary use of the asset separation tool. Since the resolution authority has to decide on a case by case basis on any possible use in resolution of funds from DGS and since such decision cannot be assumed with certainty ex ante, the resolution authorities should not consider the potential contribution of the DGS in resolution when calibrating the level of the MREL.

Or. en

Amendment 94

Gilles Boyer, Stéphanie Yon-Courtin

Proposal for a directive

Recital 30

Text proposed by the Commission

Amendment

(30) Where the resolution strategy envisages the use of resolution tools other than bail-in or alongside bail-in, the recapitalisation needs of the entity concerned will generally be smaller after resolution than in case of the sole open bank bail-in strategy. The calibration of the MREL in such a case should take that aspect into account when estimating the recapitalisation requirement. Therefore, when adjusting the level of the MREL for such resolution entities, resolution authorities should take into account the features of those tools, including the expected perimeter of the transfer to the private purchaser or to the bridge institution, the types of instruments to be transferred, the expected value and marketability of those instruments and the design of the preferred resolution strategy, including the complementary use of the asset separation tool or any other tool. In the case of the transfer tool with market exit, since the resolution authority has to decide on a case by case basis on any possible use in resolution of funds from DGS and since such decision cannot be assumed with certainty ex ante, the resolution authorities should not consider the potential contribution of the DGS in resolution when calibrating the level of the MREL.

Or. en

Justification

The principle of adjusting the MREL target to the specificities of the preferred resolution strategy needs to be implemented horizontally for all tools and combination of tools.

Amendment 95

Irene Tinagli

Proposal for a directive

Recital 31

Text proposed by the Commission

Amendment

(31) It is necessary to ensure equal incentives to build sufficient amounts of MREL for institutions and entities that would be subject to transfer strategies both in and outside resolution. The setting of level of the MREL for institutions or entities that may be subject to of measures in the context of national insolvency proceedings pursuant to Article 11(5) of Directive 2014/49/EU should therefore follow the same rules as those applicable to the setting of the MREL for resolution entities whose preferred resolution strategy provides for the sale of business or transfer to a bridge institution leading to its exit from the market.

deleted

Or. en

Amendment 96

Marco Zanni, Valentino Grant, Antonio Maria Rinaldi

Proposal for a directive

Recital 31

Text proposed by the Commission

Amendment

deleted

Or. en

Amendment 97

Fabio Massimo Castaldo

Proposal for a directive

Recital 31

Text proposed by the Commission

Amendment

deleted

Or. en

Amendment 98

Pedro Marques, René Repasi, Aurore Lalucq

Proposal for a directive

Recital 31

Text proposed by the Commission

Amendment

(31) It is necessary to establish incentives to build MREL for institutions and entities that would be subject to transfer strategies both in and outside resolution. The setting of level of the MREL for institutions or entities that may be subject to of measures in the context of national insolvency proceedings pursuant to Article 11(5) of Directive 2014/49/EU should therefore follow rules that are proportionate to those applicable to the setting of the MREL for resolution entities whose preferred resolution strategy provides for the sale of business or transfer to a bridge institution leading to its exit from the market.

Or. en

Amendment 99

René Repasi, Ernest Urtasun, Andreas Schwab

Proposal for a directive

Recital 33 a (new)

Text proposed by the Commission

Amendment

(33a) Notwithstanding current secrecy rules applicable, information exchange between resolution authorities and tax authorities should be improved. Such exchanges should be in line with national law, and, where the information originates in another Member State, it should only be disclosed with the express agreement of the relevant authority which has disclosed it.

Or. en

Justification

The proposed amendment wants to improve the exchange of information between resolution and tax authorities. Currently, the BRRD does not provide for a solid legal basis for this exchange of information. Against the background of experiences with fraudulent and illegal tax evading capital markets transactions (e.g. cum-ex or cum-cum schemes), it is necessary to improve the close cooperation of tax authorities with financial supervisory authorities and resolution authorities. The suggested amendment reflect the wording of recent amendments to the CRD and AIFMD which should also be included in the BRRD for reasons of consistency across the financial sector.

Amendment 100

Markus Ferber, Herbert Dorfmann

Proposal for a directive

Recital 34

Text proposed by the Commission

Amendment

(34) After the initial build-up period of the resolution financing arrangements referred to in Article 102(1) of Directive 2014/59/EU, their respective available financial means may face slight decreases below their target level, in particular resulting from an increase in covered deposits. The amount of the ex ante contributions likely to be called in those circumstances is thus likely to be small. It may therefore be possible that, in some years, the amount of such ex ante contributions is no longer commensurate to the cost of the collection of those contributions. Resolution authorities should therefore be able to defer the collection of the ex ante contributions for 1 or more years until the amount to be collected reaches an amount that is proportionate to the cost of the collection process, provided that such deferral does not materially affect the capacity of resolution authorities to use resolution financing arrangements.

(34) After the initial build-up period of the resolution financing arrangements referred to in Article 102(1) of Directive 2014/59/EU, the collection of ex-ante contributions ends once the target level of 1% of covered deposits has been reached.

Or. en

Amendment 101

Engin Eroglu

Proposal for a directive

Recital 34

Text proposed by the Commission

Amendment

(34) After the initial build-up period of the resolution financing arrangements referred to in Article 102(1) of Directive 2014/59/EU, the regular collection of contributions ends when the target level of 1% of the amount of covered deposits of all the institutions authorised in their territory has been reached for the first time.

Or. en

Justification

The purpose of this amendment is to clarify that the regular collection of contributions ends when the financial means of the resolution financing arrangements reaches the target level (1 % of the amount of covered deposits of all the institutions authorised in their territory) for the first time at the end of the initial period. The target level is not “dynamic”. With regard to the Single Resolution Fund in particular, it should be noted: The level to be achieved by the end of 2023, around 78 billion euros, is already around 40% higher than the originally envisaged target level, which was previously considered sufficient. This increase has on no account been the result of an increase in the willingness of banks to take more risks – as noted by, among others, the SRB. It is solely due to an increase in covered deposits. By keeping this mandatory contribution in place, the fund would be considerably more overcapitalised than it already is today.

Amendment 102

Gilles Boyer, Stéphanie Yon-Courtin

Proposal for a directive

Recital 34

Text proposed by the Commission

Amendment

(34) After the initial build-up period of the resolution financing arrangements referred to in Article 102(1) of Directive 2014/59/EU, their respective available financial means may face slight decreases below their target level, in particular resulting from an increase in covered deposits. On the other hand, there is no mechanism that would enable the redemption of contributions already paid-in that would stand in excess of the target level in the event of a decrease of the covered deposits. Also, there is no evidence as to whether the rules governing contributions should be amended to preserve a sound "polluter pays" principle after the entry into force of this directive. As a result, resolution authorities should therefore be able to defer the collection of the ex ante contributions until the amount to be collected reaches a certain threshold that would trigger a resumption of ex-ante contributions.

Or. en

Justification

This reform might change the likelihood of small and midsize banks accessing the DGS / RF. This likelihood should be reflected in the contribution rules in order to set the right incentives on a “polluter-pays” model. Until this is reviewed, there should be a pause in contributions, subject to a prudent floor.

Amendment 103

Gilles Boyer, Stéphanie Yon-Courtin

Proposal for a directive

Recital 34 a (new)

Text proposed by the Commission

Amendment

(34a) Contributions to the Deposit Guarantee Schemes (DGS) and the resolution financing arrangements should be determined in a manner that accurately assesses the likelihood of a contributing bank to impose losses for the DGS or the resolution financing arrangement. To that end, the rules governing contributions of individual banks to these funds shall mainly take into account the Minimum Requirement for Own Funds and Eligible Liabilities (MREL) capacity and quality of the concerned banks.

Or. en

Justification

This reform might change the likelihood of small and midsize banks accessing the DGS / RF. This likelihood should be reflected in the contribution rules in order to set the right incentives on a “polluter-pays” model. The risk adjustment should primarily take into account the MREL capacity and quality of the concerned banks.

Amendment 104

Gilles Boyer, Stéphanie Yon-Courtin

Proposal for a directive

Recital 34 b (new)

Text proposed by the Commission

Amendment

(34b) The target level of the resolution financing arrangements and the deposit guarantee schemes were determined in 2014 to withstand a certain adverse shock to the banking system given its loss absorption capacity at the time. Since then, the banking system has considerably increased its loss absorption capacity by building up its capital and MREL buffers, and by improving the overall asset quality primarily, with the reduction in NPLs. As a result, the same target level enables today to withstand a much bigger shock, which in turn means that there is no need to increase the target levels as a result of this review.

Or. en

Justification

This reform aims at using the funds more efficiently. But the targeted amendments should not increase the burden on the funds to an extent that would outweigh the benefit of the significant risk reduction that has taken place since 2014 and which means that today the same target level enables to withstand a much larger shock.

Amendment 105

Engin Eroglu

Proposal for a directive

Recital 35

Text proposed by the Commission

Amendment

(35) Irrevocable payment commitments are one of the components of the available financial means of resolution financing arrangements. It is therefore necessary to specify the circumstances in which those payment commitments may be called and the applicable procedure when terminating the commitments in case an institution or entity ceases to be subject to the obligation to pay contributions to a resolution financing arrangement. In addition, to provide more transparency and certainty with respect to the share of irrevocable payment commitments in the total amount of ex ante contributions to be raised, resolution authorities should determine such share on an annual basis, subject to the applicable limits.

(35) Irrevocable payment commitments are one of the components of the available financial means of resolution financing arrangements. It is therefore necessary to specify the circumstances in which those payment commitments may be called and the applicable procedure when terminating the commitments in case an institution or entity ceases to be subject to the obligation to pay contributions to a resolution financing arrangement. In addition, to provide more transparency and certainty with respect to the share of irrevocable payment commitments in the total amount of ex ante contributions to be raised, resolution authorities should grant such share in the full amount as specified in Article 103(3) of Directive 2014/59/EU.

Or. en

Justification

The European Commission's proposal to increase the IPC share (Article 103(3)) is, in principle, a good idea, however the decision on granting it and the amount of the IPC share remains subject to the discretion of the resolution authorities. In order to improve planning capabilities, the institutions should always have the option of using IPCs to an amount of 50%.

Amendment 106

Engin Eroglu

Proposal for a directive

Recital 37

Text proposed by the Commission

Amendment

(37) Directive 2014/59/EU partially harmonised the ranking of deposits under national laws governing normal insolvency proceedings. Those rules provided for a three-tier ranking of deposits, whereby covered deposits had the highest priority ranking, followed by eligible deposits of natural persons and micro, smaller and medium-sized enterprises above the coverage level. The remaining deposits, i.e. deposits of large corporates exceeding the coverage level and deposits that are not eligible for repayment by the DGS, were required to have a lower priority ranking, but their position was not otherwise harmonised. Finally, the claims of DGSs benefitted from the same higher priority ranking as covered deposits. Nevertheless, this has not proved to be the optimal solution for depositor protection. Partial harmonisation created differences in the treatment of those remaining depositors across Member States, in particular as an increasing number of Member States have decided to also grant a legal preference to the remaining deposits. Those differences also created difficulties when determining the insolvency counterfactual for cross-border groups during the resolution valuations. Furthermore, the lack of general depositor preference along with the three-tiered ranking of depositors’ claims had the potential to create problems regarding compliance with the ‘no creditor worse off’ principle, particularly when the deposits the priority of which had not been harmonised by Directive 2014/59/EU ranked at the same level as senior claims. Lastly, the high priority ranking given to the claims of DGSs had not made it possible for the available financing means of those schemes to be used in a more efficient and effective way in interventions other than the payout of covered deposits in insolvency, namely in the context of resolution, alternative measures in insolvency or preventive measures. The protection of covered deposits does not rely on the priority ranking of the claims of the DGS but is instead ensured through the mandatory exclusions from bail-in in resolution and the prompt repayment from the DGS in case of unavailability of deposits. Therefore, the ranking of deposits in the current hierarchy of claims should be amended.

deleted

Or. en

Justification

The proposed extension of co-financing through deposit guarantee funds is to be rejected. Particularly in conjunction with the proposed extension of depositor protection to unprotected deposits - which is contrary to the mandate - this can have serious effects on financing requirements and lead to a financial depletion of Deposit Guarantee Schemes.

Amendment 107

Markus Ferber, Herbert Dorfmann

Proposal for a directive

Recital 37

Text proposed by the Commission

Amendment

Or. en

Amendment 108

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Recital 37

Text proposed by the Commission

Amendment

(37) Directive 2014/59/EU partially harmonised the ranking of deposits under national laws governing normal insolvency proceedings. Those rules provided for a three-tier ranking of deposits, whereby covered deposits had the highest priority ranking, followed by eligible deposits of natural persons and micro, smaller and medium-sized enterprises above the coverage level. The remaining deposits, i.e. deposits of large corporates exceeding the coverage level and deposits that are not eligible for repayment by the DGS, were required to have a lower priority ranking, but their position was not otherwise harmonised. Finally, the claims of DGSs benefitted from the same higher priority ranking as covered deposits. Nevertheless, this has not proved to be the optimal solution for depositor protection. Partial harmonisation created differences in the treatment of those remaining depositors across Member States, in particular as an increasing number of Member States have decided to also grant a legal preference to the remaining deposits. Those differences also created difficulties when determining the insolvency counterfactual for cross-border groups during the resolution valuations. Lastly, the high priority ranking given to the claims of DGSs had not made it possible for the available financing means of those schemes to be used in a more efficient and effective way in interventions other than the payout of covered deposits in insolvency, namely in the context of resolution, alternative measures in insolvency or preventive measures. Therefore, the ranking of deposits in the current hierarchy of claims should be amended.

Or. en

Amendment 109

Roberts Zīle

Proposal for a directive

Recital 37 a (new)

Text proposed by the Commission

Amendment

(37a) In the midst of evolving financial landscapes the modification in the ranking of creditors coupled with the removal of the DGS super preference boost the accessibility of DGSs and the single resolution fund (SRF) over the traditional reliance on public support, and also lays the foundation for more financially astute solutions when addressing the complexities of resolving financial institutions.

Or. en

Amendment 110

Eero Heinäluoma

Proposal for a directive

Recital 38

Text proposed by the Commission

Amendment

(38) The ranking of all deposits should be fully harmonised through the implementation of a general depositor preference with a single-tiered approach, whereby all deposits benefit from a higher priority ranking over ordinary unsecured claims, without any differentiation between different types of deposits. At the same time, the use of the deposit guarantee schemes in resolution, insolvency and in preventive measures should always remain subject to compliance with the relevant conditionality, in particular the so-called ‘least cost test’.

deleted

Or. en

Amendment 111

Engin Eroglu

Proposal for a directive

Recital 38

Text proposed by the Commission

Amendment

deleted

Or. en

Justification

Amendment 112

Markus Ferber, Othmar Karas, Herbert Dorfmann

Proposal for a directive

Recital 38

Text proposed by the Commission

Amendment

(38) The use of the deposit guarantee schemes in resolution, insolvency and in preventive measures should always remain subject to compliance with the relevant conditionality, in particular the so-called ‘least cost test’.

Or. en

Amendment 113

Gilles Boyer, Stéphanie Yon-Courtin

Proposal for a directive

Recital 38

Text proposed by the Commission

Amendment

(38) The ranking of all deposits should be fully harmonised through the implementation of a two-tiered approach, whereby all covered deposits and that part of eligible deposits from natural persons and micro, small and medium-sized enterprises which exceeds the coverage level provided for in Article 6 of Directive 2014/49/EU benefit from a higher priority ranking over other deposits and ordinary unsecured claims, which should both rank pari passu. At the same time, the use of the deposit guarantee schemes in resolution, insolvency and in preventive measures should always remain subject to compliance with the relevant conditionality, in particular the so-called ‘least cost test’.

Or. en

Justification

Support for the introduction of a two-tier system, which strikes the right balance between increasing the firepower of the DGS under the least cost test and controlling for moral hazard on the part of large depositors, which should be treated like any other senior unsecured investor.

Amendment 114

Pedro Marques, René Repasi, Aurore Lalucq, Jonás Fernández

Proposal for a directive

Recital 38

Text proposed by the Commission

Amendment

(38) The ranking of all deposits should be fully harmonised through the implementation of a general depositor preference with a two-tiered approach, whereby deposits benefit from a higher priority ranking over ordinary unsecured claims. At the same time, the use of the deposit guarantee schemes in resolution, insolvency and in preventive measures should always remain subject to compliance with the relevant conditionality, in particular the so-called ‘least cost test’.

Or. en

Amendment 115

Luděk Niedermayer

Proposal for a directive

Recital 38

Text proposed by the Commission

Amendment

(38) The ranking of all deposits should be fully harmonised through the implementation of a general depositor preference with a two-tiered approach, whereby all deposits benefit from a higher priority ranking over ordinary unsecured claims. At the same time, the use of the deposit guarantee schemes in resolution, insolvency and in preventive measures should always remain subject to compliance with the relevant conditionality, in particular the so-called ‘least cost test’.

Or. en

Amendment 116

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Recital 38

Text proposed by the Commission

Amendment

(38) The ranking of all deposits should be fully harmonised through the implementation of a two-tiered approach, whereby eligible deposits, DGS and corporate deposits held for payment and settlement purposes rank above non-eligible deposits and large corporates deposits held for investment purposes. . At the same time, the use of the deposit guarantee schemes in resolution, insolvency and in preventive measures should always remain subject to compliance with the relevant conditionality, in particular the so-called ‘least cost test’.

Or. en

Amendment 117

Markus Ferber, Othmar Karas, Herbert Dorfmann

Proposal for a directive

Recital 39

Text proposed by the Commission

Amendment

(39) A general depositor preference will contribute to reinforcing depositors’ confidence and to further prevent the risk of bank runs. Enhanced depositor protection is also aligned with the central role deposits play in the real economy, being the primary tool for savings and for payments, as well as in the banking activity, where the deposits represent an important source of funding and are a key driver of confidence in the banking system, which becomes of particular relevance in times of market stress. Moreover, a general depositor preference improves the resolvability of institutions and entities by increasing their ability to comply with the requirements to access the resolution financing arrangements and decreasing the amount of funding required from those arrangements, due to the lower risk of breaching the ‘no creditor worse off’ principle where bailing-in ordinary unsecured debt. In particular, the removal of deposits from the insolvency class of ordinary unsecured claims would increase the bail-inability of remaining ordinary unsecured claims by minimising the risk of breaches of the ‘no creditor worse off’ principle. By reducing the likelihood of deposits being written down or converted to ensure access to the resolution financing arrangements, the general depositor preference would contribute to making the bail-in tool more effective and credible and would lead to an increase of the transparency and legal certainty of the resolution framework. The general depositor preference would also contribute to the credibility of transfer strategies in resolution, as it would facilitate the inclusion of the entire deposit contract in the perimeter of liabilities to be transferred to a private purchaser or to a bridge institution, to the benefit of the customer relationship and the franchise value of the institution under resolution. Lastly, a full harmonisation of the insolvency ranking of depositors would be beneficial from the cross-border and level playing field perspective.

deleted

Or. en

Amendment 118

Gilles Boyer, Stéphanie Yon-Courtin

Proposal for a directive

Recital 39

Text proposed by the Commission

Amendment

deleted

Or. en

Justification

Amendment 119

Engin Eroglu

Proposal for a directive

Recital 39

Text proposed by the Commission

Amendment

deleted

Or. en

Justification

Amendment 120

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Recital 39

Text proposed by the Commission

Amendment

(39) A two-tiered approach will contribute to reinforcing depositors’ confidence and to further prevent the risk of bank runs. Enhanced depositor protection is also aligned with the central role deposits play in the real economy, being the primary tool for savings and for payments, as well as in the banking activity, where the deposits represent an important source of funding and are a key driver of confidence in the banking system, which becomes of particular relevance in times of market stress. Moreover, a two-tiered approach improves the resolvability of institutions and entities by increasing their ability to comply with the requirements to access the resolution financing arrangements and decreasing the amount of funding required from those arrangements, due to the lower risk of breaching the ‘no creditor worse off’ principle where bailing-in ordinary unsecured debt.

Or. en

Amendment 121

Pedro Marques, René Repasi, Aurore Lalucq

Proposal for a directive

Recital 39

Text proposed by the Commission

Amendment

(39) A general depositor preference will contribute to reinforcing depositors’ confidence and to further prevent the risk of bank runs. Enhanced depositor protection is also aligned with the central role deposits play in the real economy, being the primary tool for savings and for payments, as well as in the banking activity, where the deposits represent an important source of funding and are a key driver of confidence in the banking system, which becomes of particular relevance in times of market stress. Moreover, a general depositor preference improves the resolvability of institutions and entities by increasing their ability to comply with the requirements to access the resolution financing arrangements. In particular, the removal of deposits from the insolvency class of ordinary unsecured claims would increase the bail-inability of remaining ordinary unsecured claims by minimising the risk of breaches of the ‘no creditor worse off’ principle. By reducing the likelihood of deposits being written down or converted to ensure access to the resolution financing arrangements, the general depositor preference would contribute to making the bail-in tool more effective and credible and would lead to an increase of the transparency and legal certainty of the resolution framework. The general depositor preference would also contribute to the credibility of transfer strategies in resolution, as it would facilitate the inclusion of more deposits in the perimeter of liabilities to be transferred to a private purchaser or to a bridge institution, to the benefit of the customer relationship and the franchise value of the institution under resolution. Lastly, a full harmonisation of the insolvency ranking of depositors would be beneficial from the cross-border and level playing field perspective.

Or. en

Amendment 122

Engin Eroglu

Proposal for a directive

Recital 40

Text proposed by the Commission

Amendment

(40) A single-tiered approach for the priority ranking of deposits under national laws governing normal insolvency proceedings contributes to a more efficient and less costly protection of all deposits. For covered deposits, that approach facilitates the financing by the DGS of measures other than the payout of covered deposits, which can be more effective and less disruptive in protecting access to the deposited funds as they do not lead to an interruption of access to bank accounts and payment services. For the deposits that are not covered, that approach facilitates their protection where necessary for the protection of financial stability and depositor confidence. Finally, by introducing flexibility in the use of those potentially less costly mechanisms for depositor protection, that approach minimises the immediate disbursement needs of the DGSs, thereby ensuring a better preservation of their available financing means in case other crises occur and decreasing the burden on the banking sector, who are called to replenish those funds.

deleted

Or. en

Justification

Amendment 123

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Recital 40

Text proposed by the Commission

Amendment

deleted

Or. en

Amendment 124

Gilles Boyer, Stéphanie Yon-Courtin

Proposal for a directive

Recital 40

Text proposed by the Commission

Amendment

deleted

Or. en

Justification

Amendment 125

Markus Ferber, Othmar Karas, Herbert Dorfmann

Proposal for a directive

Recital 40

Text proposed by the Commission

Amendment

deleted

Or. en

Amendment 126

Pedro Marques, René Repasi, Aurore Lalucq, Jonás Fernández

Proposal for a directive

Recital 40

Text proposed by the Commission

Amendment

(40) A two-tiered approach for the priority ranking of deposits under national laws governing normal insolvency proceedings improves the use of DGS in the context of resolution, thus enabling a more effective and less disruptive option which protects access to the deposited funds as they do not lead to an interruption of access to bank accounts and payment services. By introducing potentially less costly mechanisms for depositor protection, this approach minimises the immediate disbursement needs of the DGSs, thereby ensuring a better preservation of their available financing means in case other crises occur and decreasing the burden on the banking sector, who are called to replenish those funds.

Or. en

Amendment 127

Luděk Niedermayer

Proposal for a directive

Recital 40 a (new)

Text proposed by the Commission

Amendment

(40a) The two-tier priority system, as reflected in the amendments in this Directive to Article 108 of Directive 2014/59/EU, ensures that deposits excluded from coverage under Directive 2014/49/EU, as well as certain deposits of large corporates that are used for compliance with MREL, enjoy a higher priority ranking compared to ordinary unsecured creditors, but one that is lower than covered deposits, eligible deposits of natural persons and SMEs exceeding the coverage level, deposits of large corporates that do not count towards MREL, as well as claims by the DGS subrogating for covered deposits. That tiered approach is designed to provide enhanced protection for a wide range of depositors, reflecting the unique characteristics of their deposits, while opening up the possibility of resolution to entities not covered by the current framework.

Or. en

Amendment 128

Engin Eroglu

Proposal for a directive

Recital 41

Text proposed by the Commission

Amendment

(41) The changes to the priority ranking of deposits, in particular the elimination of the higher ranking of covered deposits and the claims of the DGSs relative to all other deposits, would not negatively affect the protection afforded to covered deposits in the event of failure, as that protection would continue to be guaranteed through the mandatory exclusion of covered deposits from loss absorption in case of resolution and, ultimately, by the payout provided by the DGS in event of unavailability of deposits.

deleted

Or. en

Justification

Amendment 129

Eero Heinäluoma

Proposal for a directive

Recital 41

Text proposed by the Commission

Amendment

deleted

Or. en

Amendment 130

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Recital 41

Text proposed by the Commission

Amendment

deleted

Or. en

Amendment 131

Markus Ferber, Othmar Karas, Herbert Dorfmann

Proposal for a directive

Recital 41

Text proposed by the Commission

Amendment

deleted

Or. en

Amendment 132

Gilles Boyer, Stéphanie Yon-Courtin

Proposal for a directive

Recital 41

Text proposed by the Commission

Amendment

(41) The changes to the priority ranking of deposits, in particular the elimination of the higher ranking of covered deposits and the claims of the DGSs relative to all other eligible deposits, would not negatively affect the protection afforded to covered deposits in the event of failure, as that protection would continue to be guaranteed through the mandatory exclusion of covered deposits from loss absorption in case of resolution and, ultimately, by the payout provided by the DGS in event of unavailability of deposits.

Or. en

Justification

Amendment 133

Markus Ferber, Herbert Dorfmann

Proposal for a directive

Recital 41 a (new)

Text proposed by the Commission

Amendment

(41a) While covered deposits are protected from losses in resolution, other eligible deposits are potentially available for loss absorbency purposes. In order to provide a certain level of protection for natural persons and micro, small and medium-sized enterprises holding eligible deposits above the level of covered deposits, such deposits should have a higher priority ranking over the claims of ordinary unsecured, non-preferred creditors under the national law governing normal insolvency proceedings. The claim of the deposit guarantee scheme should have an even higher ranking under such national law than the aforementioned categories of eligible deposits. Harmonisation of national insolvency law in that area is necessary in order to minimise exposure of the resolution funds of Member States under the no creditor worse off principle as specified in this Directive.

Or. en

Amendment 134

Engin Eroglu

Proposal for a directive

Recital 42

Text proposed by the Commission

Amendment

(42) Resolution financing arrangements can be used to support the application of the sale of business tool or of the bridge institution tool, whereby a set of assets, rights and liabilities of the institution under resolution are transferred to a recipient. In that case, the resolution financing arrangement may have a claim against the residual institution or entity in its subsequent winding up under normal insolvency proceedings. That may occur where the resolution financing arrangement is used in connection to losses that creditors would have otherwise borne, including under the form of guarantees to assets and liabilities or coverage of the difference between the transferred assets and liabilities. To ensure that the shareholders and creditors left behind in the residual institution or entity effectively absorb the losses of the institution under resolution and improve the possibility of repayments in insolvency to the resolution-specific safety net, those claims of the resolution financing arrangement against the residual institution or entity, and claims that arise from reasonable expenses properly incurred, should rank in insolvency above the claims of deposits and of the DGS. Since compensations paid to shareholders and creditors by resolution financing arrangements due to breaches of the ‘no creditor worse off’ principle aim to compensate for the results of resolution action, those compensations should not give rise to claims of those arrangements.

deleted

Or. en

Justification

Amendment 135

Eero Heinäluoma

Proposal for a directive

Recital 43

Text proposed by the Commission

Amendment

(43) To ensure sufficient flexibility and to facilitate DGS interventions in support of the use of the resolution tools, where they lead to the exit from the market of the institution under resolution and where necessary to prevent losses being borne by depositors, certain aspects of the use of DGS in resolution should be specified. In particular, it is necessary to specify that the DGS can be used to support transfer transactions that include deposits, including eligible deposits beyond the coverage level provided by the DGS, and also deposits excluded from repayment by a DGS, in certain cases and under clear conditions. The contribution of the DGS should be aimed at covering the shortfall in the value of the assets transferred to a buyer or bridge institution in comparison to the value of the transferred deposits. Where a contribution is required by the buyer as part of the transaction to ensure its capital neutrality and preserve compliance with the buyer’s capital requirements, the DGS should also be allowed to contribute to that effect. The support of the DGS to resolution action should take the form of cash or other forms, such as guarantees or loss sharing agreements that can minimise the impact of the support on the available financial means of the DGS while simultaneously allowing the contribution of the DGS to meet its purposes.

deleted

Or. en

Amendment 136

Engin Eroglu

Proposal for a directive

Recital 43

Text proposed by the Commission

Amendment

deleted

Or. en

Justification

Amendment 137

Engin Eroglu

Proposal for a directive

Recital 44

Text proposed by the Commission

Amendment

(44) The contribution of the DGS in resolution should be subject to certain limits. First, it should be ensured that any loss which the DGS may bear as a result of an intervention in resolution does not exceed the loss that the DGS would bear in insolvency if it paid out covered depositors and subrogated to their claims over the institution’s assets. That amount should be determined on the basis of the least cost test, in accordance with the criteria and methodology set out in Directive 2014/49/EU. Those criteria and methodology should also be used when determining the treatment that the DGS would have received had the institution entered normal insolvency proceedings when carrying out the ex-post valuation for the purposes of assessing compliance with the ‘no creditor worse off’ principle and determining any compensation owed to the DGS. Second, the amount of the DGS’s contribution aimed at covering the difference between the assets and liabilities to be transferred to a purchaser or to a bridge institution should not exceed the difference between the transferred assets and the transferred deposits and liabilities with the same or a higher priority ranking in insolvency than those deposits. That would ensure that the contribution of the DGS is only used for the purposes of avoiding the imposition of losses on depositors, where appropriate, and not for the protection of creditors that rank below deposits in insolvency. Nevertheless, the sum of the contribution of the DGS to cover the difference between assets and liabilities with the contribution of the DGS towards the own funds of the recipient entity should not exceed the cost of repaying covered depositors as calculated under the least cost test.

deleted

Or. en

Justification

Amendment 138

Markus Ferber, Herbert Dorfmann

Proposal for a directive

Recital 44

Text proposed by the Commission

Amendment

(44) The contribution of the DGS in resolution should be subject to very strict limits.

Or. en

Amendment 139

Pedro Marques, René Repasi, Aurore Lalucq, Jonás Fernández

Proposal for a directive

Recital 44

Text proposed by the Commission

Amendment

(44) The contribution of the DGS in resolution should be subject to certain limits. First, it should be ensured that any loss which the DGS may bear as a result of an intervention in resolution does not exceed the loss that the DGS would bear in insolvency if it paid out covered depositors and subrogated to their claims over the institution’s assets. That amount should be determined on the basis of the least cost test, in accordance with the criteria and methodology set out in Directive 2014/49/EU. Second, the amount of the DGS’s contribution aimed at covering the difference between the assets and liabilities to be transferred to a purchaser or to a bridge institution should not exceed the difference between the transferred assets and the transferred deposits and liabilities with the same or a higher priority ranking in insolvency than those deposits. That would ensure that the contribution of the DGS is only used for the purposes of avoiding the imposition of losses on depositors, where appropriate, and not for the protection of creditors that rank below deposits in insolvency. Nevertheless, the sum of the contribution of the DGS to cover the difference between assets and liabilities with the contribution of the DGS towards the own funds of the recipient entity should not exceed the cost of repaying covered depositors as calculated under the least cost test.

Or. en

Amendment 140

Marco Zanni, Valentino Grant, Antonio Maria Rinaldi

Proposal for a directive

Recital 44

Text proposed by the Commission

Amendment

(44) The contribution of the DGS in resolution should be subject to certain limits. First, it should be ensured that any loss which the DGS may bear as a result of an intervention in resolution does not exceed the loss that the DGS would bear in insolvency if it paid out covered depositors and subrogated to their claims over the institution’s assets. That amount should be determined on the basis of the least cost test, in accordance with the criteria and methodology set out in Directive 2014/49/EU, taking into account all relevant factors, including the time value of money as well as delays in the recovery of funds and the recovery rates expected in insolvency proceedings, based on national specificities. Those criteria and methodology should also be used when determining the treatment that the DGS would have received had the institution entered normal insolvency proceedings when carrying out the ex-post valuation for the purposes of assessing compliance with the ‘no creditor worse off’ principle and determining any compensation owed to the DGS. Second, the amount of the DGS’s contribution aimed at covering the difference between the assets and liabilities to be transferred to a purchaser or to a bridge institution should not exceed the difference between the transferred assets and the transferred deposits and liabilities with the same or a higher priority ranking in insolvency than those deposits. That would ensure that the contribution of the DGS is only used for the purposes of avoiding the imposition of losses on depositors, where appropriate, and not for the protection of creditors that rank below deposits in insolvency. Nevertheless, the sum of the contribution of the DGS to cover the difference between assets and liabilities with the contribution of the DGS towards the own funds of the recipient entity should not exceed the cost of repaying covered depositors as calculated under the least cost test.

Or. en

Amendment 141

Gilles Boyer, Stéphanie Yon-Courtin

Proposal for a directive

Recital 44

Text proposed by the Commission

Amendment

(44) The contribution of the DGS in resolution should be subject to certain limits. First, it should be ensured that any loss which the DGS may bear as a result of an intervention in resolution does not exceed the loss that the DGS would bear in insolvency if it paid out covered depositors and subrogated to their claims over the institution’s assets. That amount should be determined on the basis of the least cost test, in accordance with the criteria and methodology set out in Directive 2014/49/EU. Those criteria and methodology should also be used when determining the treatment that the DGS would have received had the institution entered normal insolvency proceedings. Second, the amount of the DGS’s contribution aimed at covering the difference between the assets and liabilities to be transferred to a purchaser or to a bridge institution should not exceed the difference between the transferred assets and the transferred deposits and liabilities with the same or a higher priority ranking in insolvency than those deposits. That would ensure that the contribution of the DGS is only used for the purposes of avoiding the imposition of losses on eligible depositors, where appropriate, and not for the protection of creditors that rank below eligible deposits in insolvency. Nevertheless, the sum of the contribution of the DGS to cover the difference between assets and liabilities with the contribution of the DGS towards the own funds of the recipient entity should not exceed the cost of repaying covered depositors as calculated under the least cost test.

Or. en

Justification

Amendment 142

Engin Eroglu

Proposal for a directive

Recital 45

Text proposed by the Commission

Amendment

(45) It should be specified that the DGS may only contribute to a transfer of liabilities other than covered deposits in the context of a resolution if the resolution authority concludes that deposits others than covered deposits cannot be bailed-in, nor left in the residual institution under resolution which will be wound up. In particular, the resolution authority should be allowed to avoid allocating losses to those deposits where the exclusion is strictly necessary and proportionate to preserve the continuity of critical functions and core business lines or where necessary to avoid widespread contagion and financial instability, which could cause a serious disturbance to the economy of the Union or of a Member State. The same reasons should apply to the inclusion in the transfer to a buyer or to a bridge institution of bail-inable liabilities with a priority ranking lower than that of deposits. In that case, the transfer of those bail-inable liabilities should not be supported by the contribution of the DGS. If any financial support to the transfer of those bail-inable liabilities is required, that support should be provided by the resolution financing arrangement.

deleted

Or. en

Justification

Amendment 143

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Recital 46

Text proposed by the Commission

Amendment

(46) Given the possibility to use DGS in resolution, it is necessary to specify further the way in which the DGS contribution can count towards the calculation of the requirements to access resolution financing arrangements. If the contribution made by shareholders and creditors of the institution under resolution through reductions, write-down or conversion of their liabilities, summed with the contribution made by the DGS, amounts to at least 8 % of the institution’s total liabilities including own funds, the institution should be able to access the resolution financing arrangement to receive further funding, where necessary to ensure effective resolution in line with the resolution objectives. If those conditions are met, the contribution of the DGS should be limited to the amount necessary to enable access to the resolution financing arrangement. To ensure that resolution continues to be primarily financed by the institution’s internal resources and to minimise distortions of competition, the possibility to use the DGS contribution to ensure access to resolution financing arrangements should only be possible for institutions for which the resolution plan or the group resolution plan does not provide for their winding up in an orderly manner in case of failure, given that the MREL determined by resolution authorities for those institutions has been set at a level that includes both the loss absorption and the recapitalisation amounts.

deleted

Or. en

Amendment 144

Engin Eroglu

Proposal for a directive

Recital 46

Text proposed by the Commission

Amendment

deleted

Or. en

Justification

Amendment 145

Martin Schirdewan

Proposal for a directive

Recital 46

Text proposed by the Commission

Amendment

(46) If the contribution made by shareholders and creditors of the institution under resolution through reductions, write-down or conversion of their liabilities amounts to at least 8 % of the institution’s total liabilities including own funds, the institution should be able to access the resolution financing arrangement to receive further funding, where necessary to ensure effective resolution in line with the resolution objectives.

Or. en

Amendment 146

Markus Ferber, Herbert Dorfmann

Proposal for a directive

Recital 46

Text proposed by the Commission

Amendment

(46) Given the possibility to use DGS in resolution, it is necessary to clarify that the DGS contribution does not count towards the calculation of the requirements to access resolution financing arrangements. Only if the contribution made by shareholders and creditors of the institution under resolution through reductions, write-down or conversion of their liabilities amounts to at least 8 % of the institution’s total liabilities including own funds, the institution should be able to access the resolution financing arrangement to receive further funding, where necessary to ensure effective resolution in line with the resolution objectives. To ensure that resolution continues to be primarily financed by the institution’s internal resources and to minimise distortions of competition, it remains of key importance that the MREL determined by resolution authorities for those institutions has been set at a level that ensures that resolution remains feasible.

Or. en

Amendment 147

Gilles Boyer, Stéphanie Yon-Courtin

Proposal for a directive

Recital 46

Text proposed by the Commission

Amendment

(46) Given the possibility to use DGS in resolution, it is necessary to specify further the way in which the DGS contribution can count towards the calculation of the requirements to access resolution financing arrangements. If the DGS is facing a risk of liquidity shortfall, and if the contribution made by shareholders and creditors of the institution under resolution through reductions, write-down or conversion of their liabilities, summed with the contribution made by the DGS, amounts to at least 8 % of the institution’s total liabilities including own funds, the institution should be able to access the resolution financing arrangement to receive further funding, where necessary to ensure effective resolution in line with the resolution objectives upon approval of the resolution authorities. If those conditions are met, the contribution of the DGS should initially be limited to the amount necessary to enable access to the resolution financing arrangement, and should be later complemented, over an appropriate period of time, by the amount required to repay the contribution made by the resolution financing arrangement. To ensure that resolution continues to be primarily financed by the institution’s internal resources and to minimise distortions of competition, the possibility to use the DGS contribution to ensure access to resolution financing arrangements should only be possible for institutions for which the resolution plan or the group resolution plan does not provide for their winding up in an orderly manner in case of failure, given that the MREL determined by resolution authorities for those institutions has been set at a level that includes both the loss absorption and the recapitalisation amounts.

Or. en

Justification

OPTION 1 : Bridge in liquidity support to the DGS: (Low level of ambition in CMDI package to harmonize crisis management) : The bridge needs to be negotiated hand in hand with the level of ambition on the rest of the review. If there is support for a material expansion of the scope of resolution, for a robust MREL requirement for new transfer tool with market exit, and further conditionalities on the alternative and preventive measures that have been used in the past to circumvent resolution, then it would be appropriate to introduce a loss sharing mechanism to offset part of the cost of the LCT intervention of the DGS with the support of the resolution financing arrangement/SRF.

Amendment 148

Gilles Boyer, Stéphanie Yon-Courtin

Proposal for a directive

Recital 46

Text proposed by the Commission

Amendment

(46) Given the possibility to use DGS in resolution, it is necessary to specify further the way in which the DGS contribution can count towards the calculation of the requirements to access resolution financing arrangements. If the contribution made by shareholders and creditors of the institution under resolution through reductions, write-down or conversion of their liabilities, summed with the contribution made by the DGS, amounts to at least 8 % of the institution’s total liabilities including own funds, the institution should be able to access the resolution financing arrangement to receive further funding, where necessary to ensure effective resolution in line with the resolution objectives. If those conditions are met, the contribution of the DGS should be limited to the amount necessary to enable access to the resolution financing arrangement, and to shield covered deposits should they not have been protected from bail-in. To ensure that resolution continues to be primarily financed by the institution’s internal resources and to minimise distortions of competition, the possibility to use the DGS contribution to ensure access to resolution financing arrangements should only be possible for institutions for which the resolution plan or the group resolution plan does not provide for their winding up in an orderly manner in case of failure, given that the MREL determined by resolution authorities for those institutions has been set at a level that includes both the loss absorption and the recapitalisation amounts, and only in cases where the concerned institution has been compliant at least once with its fully fledged MREL requirements.

Or. en

Justification

OPTION 2 : Bridge in loss sharing between DGS and RF/SRF: (High level of ambition in CMDI package to harmonize crisis management) : The bridge needs to be negotiated hand in hand with the level of ambition on the rest of the review. If the level of ambition on the rest of the package is more limited, then the RF/SRF intervention under the bridge should be designed as a liquidity support for the concerned DGS, which would have to repay the RF/SRF after a certain period of time.

Amendment 149

Luděk Niedermayer

Proposal for a directive

Article 1 – paragraph 1 – point 1 – point b

Directive 2014/59/EU

Article 2 – paragraph 1 – point 35

Text proposed by the Commission

Amendment

(35) ‘critical functions’ means activities, services or operations the discontinuance of which is likely in one or more Member States to lead to the disruption of services that are essential to the real economy or to disrupt financial stability at national level, or regional level on a significant scale, due to the size, market share, external and internal interconnectedness, complexity or cross-border activities of an institution or group, with particular regard to the substitutability of those activities, services or operations. For the purposes of this point, the regional level shall be assessed with reference to the territorial unit corresponding to level 1 or level 2 territorial units of the Nomenclature of territorial units for statistics (NUTS level 1 or 2) within the meaning of Regulation (EC) No 1059/2003 of the European Parliament and of the Council*;

Or. en

Amendment 150

Engin Eroglu

Proposal for a directive

Article 1 – paragraph 1 – point 1 – point b

Directive 2014/59/EU

Article 2 – paragraph 1 – point 35

Text proposed by the Commission

Amendment

(35) ‘critical functions’ means activities, services or operations the discontinuance of which is likely in one or more Member States to lead to the disruption of services that are essential to the real economy or to disrupt financial stability at national level or where the disturbance of services at regional level implies a material risk of a systemic crisis at national level, due to the size, market share, external and internal interconnectedness, complexity or cross-border activities of an institution or group, with particular regard to the substitutability of those activities, services or operations;

Or. en

Justification

Financial stability can hardly be impaired at a regional level only. What should be taken into account instead are impairments of critical functions at a regional level that may eventually result in a systemic crisis (as defined in Art. 2 (1) no. 30 BRRD).

Amendment 151

Herbert Dorfmann, Othmar Karas

Proposal for a directive

Article 1 – paragraph 1 – point 1 – point b

Directive 2014/59/EU

Article 2 – paragraph 1 – point 35

Text proposed by the Commission

Amendment

(35) ‘critical functions’ means activities, services or operations the discontinuance of which is likely in one or more Member States to lead to the disruption of services that are essential to the real economy or to disrupt financial stability at national level, or where the disruption of services at regional level implies a material risk of a systemic crisis at national level, due to the size, market share, external and internal interconnectedness, complexity or cross-border activities of an institution or group, with particular regard to the substitutability of those activities, services or operations;

Or. en

Justification

Financial stability as such can hardly be impacted at a regional level only. What should be taken care of instead are impairments of critical functions at a regional level that may eventually result in a systemic crisis (as defined in Art. 2 (1) no. 30 BRRD).

Amendment 152

Ralf Seekatz

Proposal for a directive

Article 1 – paragraph 1 – point 1 – point b

Directive 2014/59/EU

Article 2 – paragraph 1 – point 35

Text proposed by the Commission

Amendment

(35) ‘critical functions’ means activities, services or operations the discontinuance of which is in one or more Member States to lead to the disruption of services that are essential to the real economy or to the disruption of financial stability at national level, or at the discretion of the Member States at regional level, due to the size, market share, external and internal interconnectedness, complexity or cross-border activities of an institution or group, with particular regard to the substitutability of those activities, services or operations;;

Or. en

Amendment 153

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Article 1 – paragraph 1 – point 1 – point b

Directive 2014/59/EU

Article 2 – paragraph 1 – point 35

Text proposed by the Commission

Amendment

Or. en

Amendment 154

Othmar Karas

Proposal for a directive

Article 1 – paragraph 1 – point 1 – point b

Directive 2014/59/EU

Article 2 – paragraph 1 – point 35

Text proposed by the Commission

Amendment

Or. en

Justification

Critical functions should be limited to financial stability at union or national level, not at regional level.

Amendment 155

Markus Ferber

Proposal for a directive

Article 1 – paragraph 1 – point 1 – point b

Directive 2014/59/EU

Article 2 – paragraph 1 – point 35

Text proposed by the Commission

Amendment

Or. en

Justification

Resolution should be limited to instances where financial stability is at risk.

Amendment 156

Martin Schirdewan

Proposal for a directive

Article 1 – paragraph 1 – point 1 – point b

Directive 2014/59/EU

Article 2 – paragraph 1 – point 35

Text proposed by the Commission

Amendment

Or. en

Amendment 157

Joachim Schuster

Proposal for a directive

Article 1 – paragraph 1 – point 1 – point b

Directive 2014/59/EU

Article 2 – paragraph 1 – point 35

Text proposed by the Commission

Amendment

Or. en

Amendment 158

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Article 1 – paragraph 1 – point 1 – point d a (new)

Directive 2014/59/EU

Article 2 – paragraph 1 – point 90 a (new)

Text proposed by the Commission

Amendment

(da) the following point is inserted:

(90a) ‘significant branches’ means a branch of a credit institution that has been considered significant in accordance with Article 51 of Directive 2013/36/EU

Or. en

Amendment 159

Gilles Boyer, Stéphanie Yon-Courtin

Proposal for a directive

Article 1 – paragraph 1 – point 1 – point e

Directive 2014/59/EU

Article 2 – paragraph 1 – point 93 a (new)

Text proposed by the Commission

Amendment

(93a) ‘deposit’ means, for the purposes of Articles 108 and 109, deposit as defined in Article 2(1), point (3), of Directive 2014/49/EU;;

deleted

Or. en

Justification

In the absence of a single-tiered general depositor preference, references to existing provisions are sufficient.

Amendment 160

Markus Ferber, Herbert Dorfmann

Proposal for a directive

Article 1 – paragraph 1 – point 1 – point e a (new)

Directive 2014/59/EU

Article 2 – paragraph 1 – point 93 b (new)

Text proposed by the Commission

Amendment

(ea) the following point is inserted:

(93b) ‘total liabilities including own funds’ means total liabilities as defined in Section 3 of Council Directive 86/635/EEC, or as defined in accordance with the International Financial Reporting Standards referred to in Regulation (EC) No 1606/2002 of the European Parliament and of the Council, including own funds as defined in point (118) of Article 4(1) of Regulation (EU) No 575/2013, in the case of institutions operating promotional loans, excluding the liabilities of the intermediary institution towards the originating or another promotional bank or another intermediary institution and the liabilities of the promotional bank towards its funding parties in so far as the amount of those liabilities is matched by the promotional loans of that institution;

Or. en

Justification

Amendments to definitions on ‘total liabilities including own funds’, ‘promotional bank’, ‘promotional loan’ and ‘intermediary institution’ to be read in conjunction: excludes pass-through liabilities from promotional loans from MREL calculations.

Amendment 161

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Article 1 – paragraph 1 – point 1 – point e a (new)

Directive 2014/59/EU

Article 2 – paragraph 1 – point 97 a (new)

Text proposed by the Commission

Amendment

(ea) the following point is inserted:

(97a) ‘retail deposits’ means a deposit that is held by a natural person or a small and medium enterprise as defined in Article 3(2) and 3(3) of Directive 2013/34/EU

Or. en

Amendment 162

Markus Ferber, Herbert Dorfmann

Proposal for a directive

Article 1 – paragraph 1 – point 1 – point e b (new)

Directive 2014/59/EU

Article 2 – paragraph 1 – point 93 c (new)

Text proposed by the Commission

Amendment

(eb) the following point is inserted:

(93c) ‘promotional bank’ means any undertaking or entity set up by a Member State, central or regional government, which grants promotional loans on a non-competitive, not for profit basis in order to promote that government's public policy objectives, provided that that government has an obligation to protect the economic basis of the undertaking or entity and maintain its viability throughout its lifetime, or that at least 90 % of its original funding or the promotional loan it grants is directly or indirectly guaranteed by the Member State's central or regional government;

Or. en

Justification

Amendment 163

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Article 1 – paragraph 1 – point 1 – point e b (new)

Directive 2014/59/EU

Article 2 – paragraph 1 – point 97 b (new)

Text proposed by the Commission

Amendment

(eb) the following point is inserted:

(97b) ‘corporate deposit for payment and settlement purposes’ means a deposit held by a legal person which have all the following features:

(a) it is payable at par on demand;

(b) it is able to provide payment and settlement services;

(d) it is not a financial instrument as defined in Article 4(1)(15) of Directive 2014/65/EU;

Or. en

Amendment 164

Markus Ferber, Herbert Dorfmann

Proposal for a directive

Article 1 – paragraph 1 – point 1 – point e c (new)

Directive 2014/59/EU

Article 2 – paragraph 1 – point 93 d (new)

Text proposed by the Commission

Amendment

(ec) the following point is inserted:

(93d) ‘promotional loan’ means a loan granted by a promotional bank or through an intermediate bank on a noncompetitive, not for profit basis, in order to promote the public policy objectives of central or regional governments in a Member State;

Or. en

Justification

Amendment 165

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Article 1 – paragraph 1 – point 1 – point e c (new)

Directive 2014/59/EU

Article 2 – paragraph 1 – point 97 c (new)

Text proposed by the Commission

Amendment

(ec) the following point is inserted:

(97c) ‘Other corporate deposit’ means a deposit held by a legal person which is not a corporate deposit for payment and settlement purposes;

Or. en

Amendment 166

Markus Ferber, Herbert Dorfmann

Proposal for a directive

Article 1 – paragraph 1 – point 1 – point e d (new)

Directive 2014/59/EU

Article 2 – paragraph 1 – point 93 e (new)

Text proposed by the Commission

Amendment

(ed) the following point is inserted:

(93e) ‘intermediary institution’ means a credit institution which intermediates promotional loans provided that it does not give them as credit to a final customer;’

Or. en

Justification

Amendment 167

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Article 1 – paragraph 1 – point 2

Directive 2014/59/EU

Article 5 – paragraph 2 – subparagraph 2

Text proposed by the Commission

Amendment

In the absence of changes referred to in the first subparagraph in 12 months following the latest annual update of the recovery plan, the competent authorities may exceptionally waive, until the subsequent 12-month period, the obligation to update the recovery plan.

deleted

Or. en

Amendment 168

Markus Ferber, Herbert Dorfmann

Proposal for a directive

Article 1 – paragraph 1 – point 2

Directive 2014/59/EU

Article 5 – paragraph 2 – subparagraph 2

Text proposed by the Commission

Amendment

In the absence of changes referred to in the first subparagraph in 12 months following the latest annual update of the recovery plan, the competent authorities shall exceptionally waive, until the subsequent 12-month period, the obligation to update the recovery plan.

Or. en

Amendment 169

Engin Eroglu

Proposal for a directive

Article 1 – paragraph 1 – point 2

Directive 2014/59/EU

Article 5 – paragraph 2 – subparagraph 2

Text proposed by the Commission

Amendment

Or. en

Justification

It would be more to the point to make the requirement set forth in the second subparagraph of Article 5(2) BRRD draft binding and not discretionary in nature.

Amendment 170

Gilles Boyer, Stéphanie Yon-Courtin

Proposal for a directive

Article 1 – paragraph 1 – point 2

Directive 2014/59/EU

Article 5 – paragraph 3 – point c a (new)

Text proposed by the Commission

Amendment

(ca) support from a deposit guarantee scheme, whatever the form of the intervention.

Or. en

Justification

Recovery plans shall not assume any form of external support, and DGS preventive measures that do not fall under the scope of Article 32c should be included as well, in order to preserve the level playing field.

Amendment 171

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Article 1 – paragraph 1 – point 2

Directive 2014/59/EU

Article 5 – paragraph 4

Text proposed by the Commission

Amendment

4. Recovery plans shall include, where applicable, an analysis of how and when an institution may apply, in the conditions addressed by the plan, for the use of central bank facilities not excluded from the scope of the recovery plan pursuant to paragraph 3 and identify those assets which would be expected to qualify as collateral.;

4. Recovery plans shall include, where applicable, an analysis of how and when an institution may apply, in the conditions addressed by the plan, for the use of central bank facilities not excluded from the scope of the recovery plan pursuant to paragraph 3 and identify on a regular and at least on a quarterly basis those assets which would be expected to qualify as collateral.;

Or. en

Amendment 172

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Article 1 – paragraph 1 – point 2 a (new)

Directive 2014/59/EU

Article 5 – paragraph 8

Present text

Amendment

(2a) in Article 5, paragraph 8 is replaced by the following:

Member States may provide that competent authorities have the power to require an institution to maintain detailed records of financial contracts to which the institution concerned is a party.

"Member States shall provide that competent authorities have the power to require an institution to maintain detailed records of financial contracts to which the institution concerned is a party.

Or. en

(https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32014L0059)

Amendment 173

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Article 1 – paragraph 1 – point 2 b (new)

Directive 2014/59/EU

Article 5 – paragraph 10 a (new)

Commission proposal

Amendment

(2b) in Article 5, the following paragraph 10a is added:

"10a. EBA shall develop draft regulatory technical standards specifying the methodology for determining a significant deterioration of the financial situation referred to in paragraph 1 and the changes to the legal or organizational structure of the institution, its business or its financial situation referred to in paragraph 2.EBA shall submit those draft regulatory technical standards to the Commission by 6 months [ please insert 12 after entry into force of this Directive]. Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1093/2010.

Or. en

(Directive 2014/59/EU)

Amendment 174

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Article 1 – paragraph 1 – point 2 c (new)

Directive 2014/59/EU

Article 6 – paragraph 2 – point a

Present text

Amendment

(2c) in Article 6(2), point (a) is replaced by the following:

(a) the implementation of the arrangements proposed in the plan is reasonably likely to maintain or restore the viability and financial position of the institution or of the group, taking into account the preparatory measures that the institution has taken or has planned to take;

"(a) the implementation of the arrangements proposed in the plan is reasonably likely to maintain or restore within a reasonable timeframe the viability, liquidity and financial position of the institution or of the group, taking into account the preparatory measures that the institution has taken or has planned to take;

Or. en

(https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32014L0059)

Amendment 175

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Article 1 – paragraph 1 – point 2 d (new)

Directive 2014/59/EU

Article 6 – paragraph 4

Present text

Amendment

(2d) in Article 6, paragraph 4 is replaced by the following:

4. The competent authority shall provide the recovery plan to the resolution authority. The resolution authority may examine the recovery plan with a view to identifying any actions in the recovery plan which may adversely impact the resolvability of the institution and make recommendations to the competent authority with regard to those matters.

"4. The competent authority shall provide the recovery plan to the resolution authority. The resolution authority shall examine the recovery plan with a view to identifying any actions in the recovery plan which may adversely impact the resolvability of the institution and make recommendations to the competent authority with regard to those matters.

Or. en

(https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32014L0059)

Amendment 176

Pedro Marques, René Repasi, Aurore Lalucq

Proposal for a directive

Article 1 – paragraph 1 – point 3 – introductory part

Text proposed by the Commission

Amendment

(3) in Article 6, paragraph 5 is replaced by the following:

(3) in Article 6, paragraph 5, the first subparagraph is replaced by the following:

Or. en

Amendment 177

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Article 1 – paragraph 1 – point 3

Directive 2014/59/EU

Article 6 – paragraph 5 – subparagraph 1

Text proposed by the Commission

Amendment

5. Where the competent authority assesses that there are material deficiencies in the recovery plan, or material impediments to its implementation, it shall notify the institution or the parent undertaking of the group of its assessment and shall require the institution to submit, within 3 months, extendable with the authorities’ approval by 1 month, a revised plan demonstrating how those deficiencies or impediments are addressed.;

5. Where the competent authority assesses that there are material deficiencies in the recovery plan, or material impediments to its implementation or where the resolution authority makes recommendations referred to in paragraph 4, the competent authority shall notify the institution or the parent undertaking of the group of its assessment and shall require the institution to submit, within 1 month, extendable with the authorities’ approval by 1 month, a revised plan demonstrating how those deficiencies or impediments are addressed.;

Or. en

Amendment 178

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Article 1 – paragraph 1 – point 3 a (new)

Directive 2014/59/EU

Article 6 – paragraph 6

Present text

Amendment

(3a) in Article 6, paragraph 6 is replaced by the following:

6. If the institution fails to submit a revised recovery plan, or if the competent authority determines that the revised recovery plan does not adequately remedy the deficiencies or potential impediments identified in its original assessment, and it is not possible to adequately remedy the deficiencies or impediments through a direction to make specific changes to the plan, the competent authority shall require the institution to identify within a reasonable timeframe changes it can make to its business in order to address the deficiencies in or impediments to the implementation of the recovery plan.

"6. If the institution fails to submit a revised recovery plan, or if the competent authority determines that the revised recovery plan does not adequately remedy the deficiencies or potential impediments identified in its original assessment, and it is not possible to adequately remedy the deficiencies or impediments through a direction to make specific changes to the plan, the competent authority shall require the institution to identify within a specified timeframe changes it can make to its business in order to address the deficiencies in or impediments to the implementation of the recovery plan or direct the institution to take any measures it considers to be appropriate, taking into account the seriousness of the deficiencies and impediments and the effect of the measures on the institution’s business.

If the institution fails to identify such changes within the timeframe set by the competent authority, or if the competent authority assesses that the actions proposed by the institution would not adequately address the deficiencies or impediments, the competent authority may direct the institution to take any measures it considers to be necessary and proportionate, taking into account the seriousness of the deficiencies and impediments and the effect of the measures on the institution’s business.

The competent authority may, without prejudice to Article 104 of Directive 2013/36/EU, direct the institution to:

(a)reduce the risk profile of the institution, including liquidity risk;

(a)reduce the risk profile of the institution, including liquidity risk and restore within a specified timeframe the liquidity coverage ratio to a certain threshold above the minimum requirement established in Regulation (EU) N° 575/2013;

(b)enable timely recapitalisation measures;

(c)review the institution’s strategy and structure;

(d)make changes to the funding strategy so as to improve the resilience of the core business lines and critical functions;

(e)make changes to the governance structure of the institution.

The list of measures referred to in this paragraph does not preclude Member States from authorising competent authorities to take additional measures under national law.

The list of measures referred to in this paragraph does not preclude Member States from authorising competent authorities to take additional measures under national law."

Or. en

(Directive 2014/59/EU)

Amendment 179

Engin Eroglu

Proposal for a directive

Article 1 – paragraph 1 – point 4

Directive 2014/59/EU

Article 8 – paragraph 2

Text proposed by the Commission

Amendment

(4) in Article 8(2), the third subparagraph is replaced by the following:

deleted

‘

EBA may, at the request of a competent authority, assist the competent authorities in reaching a joint decision in accordance with Article 31(2), point (c), of Regulation (EU) No 1093/2010.;

’

Or. en

Amendment 180

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Article 1 – paragraph 1 – point 4 a (new)

Directive 2014/59/EU

Article 9 – paragraph 1 – first subparagraph

Present text

Amendment

(4a) In Article 9(1), the first subparagraph is replaced by the following:

1. For the purpose of Articles 5 to 8, competent authorities shall require that each recovery plan includes a framework of indicators established by the institution which identifies the points at which appropriate actions referred to in the plan may be taken. Such indicators shall be agreed by competent authorities when making the assessment of recovery plans in accordance with Articles 6 and 8. The indicators may be of a qualitative or quantitative nature relating to the institution’s financial position and shall be capable of being monitored easily. Competent authorities shall ensure that institutions put in place appropriate arrangements for the regular monitoring of the indicators.

"1. For the purpose of Articles 5 to 8, competent authorities shall require that each recovery plan includes a framework of indicators established by the institution which identifies the points at which appropriate actions referred to in the plan may be taken. The indicators shall at least include a minimum set of triggers developed under Article 27. Such indicators shall be agreed by competent authorities when making the assessment of recovery plans in accordance with Articles 6 and 8. The indicators may be of a qualitative or quantitative nature relating to the institution’s financial position and shall be capable of being monitored easily. Competent authorities shall ensure that institutions put in place appropriate arrangements for the regular monitoring of the indicators.

Or. en

(Directive 2014/59/EU)

Amendment 181

Gilles Boyer, Stéphanie Yon-Courtin

Proposal for a directive

Article 1 – paragraph 1 – point 4 a (new)

Directive 2014/59/EU

Article 10 – paragraph 3 – point c a (new)

Text proposed by the Commission

Amendment

(4a) in Article 10(3), the following point is added:

‘(ca) any use of deposit guarantee schemes’

Or. en

Justification

Internal resources should remain the first line of defence. Consequently, any external funding, including the use of DGS in resolution, should be used only in case of unplanned gaps in resources, subject to applicable conditions. As a consequence, resolution planning and MREL calibration should not assume any use of DGS funds in resolution.

Amendment 182

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Article 1 – paragraph 1 – point 4 b (new)

Directive 2014/59/EU

Article 10 – paragraph 2

Present text

Amendment

(4b) in Article 10, paragraph 2 is replaced by the following:

2. When drawing up the resolution plan, the resolution authority shall identify any material impediments to resolvability and, where necessary and proportionate, outline relevant actions for how those impediments could be addressed, according to Chapter II of this Title.

"2. When drawing up the resolution plan, the resolution authority shall identify any material impediments to resolvability and, where appropriate, outline relevant actions for how those impediments could be addressed, according to Chapter II of this Title.

Or. en

(Directive 2014/59/EU)

Amendment 183

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Article 1 – paragraph 1 – point 4 c (new)

Directive 2014/59/EU

Article 10 – paragraph 4

Present text

Amendment

(4c) in Article 10, paragraph 4 is replaced by the following:

4. The resolution plan shall include an analysis of how and when an institution may apply, in the conditions addressed by the plan, for the use of central bank facilities and shall identify those assets which would be expected to qualify as collateral.

"4. The resolution plan shall include an analysis of how and when an institution may apply, in the conditions addressed by the plan, for the use of central bank facilities and shall identify those assets which would be expected to qualify as collateral while providing a prudent estimation of its average yearly value in aggregate for central bank liquidity purposes taking due account of relevant haircuts.

Or. en

(Directive 2014/59/EU)

Amendment 184

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Article 1 – paragraph 1 – point 4 d (new)

Directive 2014/59/EU

Article 10 – paragraph 7

Present text

Amendment

(4d) in Article 10, paragraph 7 is replaced by the following:

7. Without prejudice to Article 4, the resolution plan shall set out options for applying the resolution tools and resolution powers referred to in Title IV to the institution. It shall include, quantified whenever appropriate and possible:

"7. Without prejudice to Article 4, the resolution plan shall set out options for applying the resolution tools and resolution powers referred to in Title IV to the institution. It shall include, quantified whenever appropriate and possible:

(a)a summary of the key elements of the plan;

(aa) where applicable, a detailed description of the reasons for determining that an institution is to be qualified as a liquidation entity;

(b)a summary of the material changes to the institution that have occurred after the latest resolution information was filed;

(c)a demonstration of how critical functions and core business lines could be legally and economically separated, to the extent necessary, from other functions so as to ensure continuity upon the failure of the institution;

(d)an estimation of the timeframe for executing each material aspect of the plan;

(e)a detailed description of the assessment of resolvability carried out in accordance with paragraph 2 of this Article and with Article 15;

(f)a description of any measures required pursuant to Article 17 to address or remove impediments to resolvability identified as a result of the assessment carried out in accordance with Article 15;

(g)a description of the processes for determining the value and marketability of the critical functions, core business lines and assets of the institution;

(h)a detailed description of the arrangements for ensuring that the information required pursuant to Article 11 is up to date and at the disposal of the resolution authorities at all times;(i)an explanation by the resolution authority as to how the resolution options could be financed without the assumption of any of the following:

(i)any extraordinary public financial support besides the use of the financing arrangements established in accordance with Article 100;

(i)any extraordinary public financial support besides to the entity under resolution or entities acquiring parts of its business the use of the financing arrangements established in accordance with Article 100;

(ii)any central bank emergency liquidity assistance;or

(iii)any central bank liquidity assistance provided under non-standard collateralisation, tenor and interest rate terms;

(j)a detailed description of the different resolution strategies that could be applied according to the different possible scenarios and the applicable timescales;(k)a description of critical interdependencies;

(l)a description of options for preserving access to payments and clearing services and other infrastructures and, an assessment of the portability of client positions;

(m)an analysis of the impact of the plan on the employees of the institution, including an assessment of any associated costs, and a description of envisaged procedures to consult staff during the resolution process, taking into account national systems for dialogue with social partners where applicable;

(n)a plan for communicating with the media and the public;

(o)the minimum requirement for own funds and eligible liabilities required pursuant to Article 45(1) and a deadline to reach that level, where applicable;

(p)where applicable, the minimum requirement for own funds and contractual bail-in instruments pursuant to Article 45(1), and a deadline to reach that level, where applicable;

(pa) a detailed and comprehensive list of eligible liabilities instruments including whether their holders qualify as retail or professional investors pursuant to Directive 2014/65/EU.

(pb) a detailed and quantified list of covered deposits, retail deposits, corporate deposits for payment and settlement purposes and other corporate deposits as defined respectively in Article 2(1) points (95), (97), (98) and (98a)

(q)a description of essential operations and systems for maintaining the continuous functioning of the institution’s operational processes;

(r)where applicable, any opinion expressed by the institution in relation to the resolution plan.

Or. en

(Directive 2014/59/EU)

Amendment 185

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Article 1 – paragraph 1 – point 4 e (new)

Directive 2014/59/EU

Article 10 – paragraph 8

Present text

Amendment

(4e) in Article 10, paragraph 8 is replaced by the following:

8. Member States shall ensure that resolution authorities have the power to require an institution and an entity referred to in point (b), (c) or (d) of Article 1(1) to maintain detailed records of financial contracts to which it is a party. The resolution authority may specify a time-limit within which the institution or entity referred to in point (b), (c) or (d) of Article 1(1) is to be capable of producing those records. The same time-limit shall apply to all institutions and all entities referred to in point (b), (c) and (d) of Article 1(1) under its jurisdiction. The resolution authority may decide to set different time-limits for different types of financial contracts as referred to in Article 2(100). This paragraph shall not affect the information gathering powers of the competent authority.

"8. Member States shall ensure that resolution authorities have the power to require an institution and an entity referred to in point (b), (c) or (d) of Article 1(1) to maintain detailed records of financial contracts to which it is a party. The resolution authority shall specify a time-limit within which the institution or entity referred to in point (b), (c) or (d) of Article 1(1) is to be capable of producing those records. The same time-limit shall apply to all institutions and all entities referred to in point (b), (c) and (d) of Article 1(1) under its jurisdiction. The resolution authority may decide to set different time-limits for different types of financial contracts as referred to in Article 2(100). This paragraph shall not affect the information gathering powers of the competent authority.

Or. en

(Directive 2014/59/EU)

Amendment 186

Engin Eroglu

Proposal for a directive

Article 1 – paragraph 1 – point 5

Directive 2014/59/EU

Article 10 – paragraph 8 a

Text proposed by the Commission

Amendment

(5) in Article 10, the following paragraph 8a is inserted:

deleted

‘

8a. Resolution authorities shall not adopt resolution plans where an institution is being wound up in accordance with the applicable national law pursuant to Article 32b or where Article 37(6) applies.;

’

Or. en

Amendment 187

Jonás Fernández

Proposal for a directive

Article 1 – paragraph 1 – point 4a (new)

Directive 2014/59/EU

Article 10 – paragraph 7 – point f a (new)

Text proposed by the Commission

Amendment

(4a) in Article 10(7), the following point is inserted:

(fa) a detailed description of the reasons for determining that an institution is to be qualified as a liquidation entity, including explaining how the resolution authority came to the conclusion that the institution lacks critical functions;

Or. en

Amendment 188

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Article 1 – paragraph 1 – point 5

Directive 2014/59/EU

Article 10 – paragraph 8 a

Text proposed by the Commission

Amendment

deleted

Or. en

Amendment 189

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Article 1 – paragraph 1 – point 5

Directive 2014/59/EU

Article 10 – paragraph 8 a a (new)

Text proposed by the Commission

Amendment

8aa. The resolution authority shall disclose on its website the resolution plans of institutions under its remit on an annual basis. Commercially sensitive information or information that is protected by statutory confidentiality provisions, shall be redacted from such disclosures.

Or. en

Amendment 190

Jonás Fernández

Proposal for a directive

Article 1 – paragraph 1 – point 5 a (new)

Directive 2014/59/EU

Article 10 – paragraph 9 – subparagraph 2

Present text

Amendment

(5a) in Article 10(9), the second subparagraph is replaced by the following:

EBA shall submit those draft regulatory technical standards to the Commission by 3 July 2015.

"EBA shall submit those draft regulatory technical standards to the Commission by [6 months after entry into force of this amending Directive].

Or. en

(https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32014L0059)

Amendment 191

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Article 1 – paragraph 1 – point 5 a (new)

Directive 2014/59/EU

Article 11 – paragraph 1 – subparagraph 2

Present text

Amendment

(5a) in Article 11(1), the second subparagraph is replaced by the following:

In particular the resolution authorities shall have the power to require, among other information, the information and analysis specified in Section B of the Annex.

"In particular the resolution authorities shall have the power to require within 24 hours, among other information, the information and analysis specified in Section B of the Annex.

Or. en

(Directive 2014/59/EU)

Amendment 192

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Article 1 – paragraph 1 – point 6 – point a

Directive 2014/59/EU

Article 12 – paragraph 1 – subparagraph 3

Text proposed by the Commission

Amendment

The identification of the measures to be taken in respect of the subsidiaries referred to in the first subparagraph, point (b), that are not resolution entities may be subject to a simplified approach by resolution authorities if such approach does not negatively affect the resolvability of the group, taking into account the size of the subsidiary, its risk profile, the absence of critical functions and the group resolution strategy.;

deleted

Or. en

Amendment 193

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Article 1 – paragraph 1 – point 6 – point a

Directive 2014/59/EU

Article 12 – paragraph 1 – subparagraph 3

Text proposed by the Commission

Amendment

(a) in paragraph 1, the following third subparagraph is added:

(a) in paragraph 1, the following third and fourth subparagraphs are added:

‘The identification of the measures to be taken in respect of the subsidiaries referred to in the first subparagraph, point (b), that are not resolution entities may be subject to a simplified approach by resolution authorities if such approach does not negatively affect the resolvability of the group, taking into account the size of the subsidiary, its risk profile, the absence of critical functions and the group resolution strategy.’

The group resolution plan shall also determine whether entities within a resolution group other than the resolution entity, qualify as liquidation entities. Without prejudice to other factors that may be deemed relevant by resolution authorities, entities that provide critical functions or critical services or are material subsidiaries pursuant Article 4(1) point 135 of Regulation (EU) 575/2013 shall not qualify as liquidation entities.

Or. en

(https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02014L0059-20221114)

Amendment 194

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Article 1 – paragraph 1 – point 6 – point a a (new)

Directive 2014/59/EU

Article 12 – paragraph 2

Present text

Amendment

(aa) in Article 12, paragraph 2 is replaced by the following:

2. The group resolution plan shall be drawn up on the basis of the information provided pursuant to Article 11.

"2. The group resolution plan shall be drawn up on the basis of the requirements under Article 10 and the information provided pursuant to Article 11.

Or. en

(Directive 2014/59/EU)

Amendment 195

Jonás Fernández

Proposal for a directive

Article 1 – paragraph 1 – point 6 – point a a (new)

Directive 2014/59/EU

Article 12 – paragraph 3 – point – a a (new)

Text proposed by the Commission

Amendment

(aa) in paragraph 3, the following point is inserted:

(-aa) a detailed description of the reasons for determining that a group entity referred to in points (a) to (d) of paragraph 1 is to be qualified as a liquidation entity, including explaining how the resolution authority came to the conclusion that the institution lacks critical functions, and how the ratio of its total risk exposure amount and operating income in the group’s total risk exposure amount and operating income, as well as the leverage ratio of the group entity in the context of the group have been taken into account;

Or. en

Amendment 196

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Article 1 – paragraph 1 – point 6 – point a a (new)

Directive 2014/59/EU

Article 12 – paragraph 3 – points a b and a c (new)

Text proposed by the Commission

Amendment

(aa) in paragraph 3, the following points (ab) and (ac) are inserted:

"(ab) where a group comprises more than one resolution group, set out the resolution actions that are to be taken for the resolution entities of each resolution group and the implications of those actions on both of the following:

(i) other group entities that belong to the same resolution group;

(ii) other resolution groups;

(ac) a detailed description of the reasons for determining that a group entity referred to in points (a) to (d) of paragraph 1 is to be qualified as a liquidation entity;

Or. en

(Directive 2014/59/EU)

Amendment 197

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Article 1 – paragraph 1 – point 6 – point b

Directive 2014/59/EU

Article 12 – paragraph 5 a

Text proposed by the Commission

Amendment

5a. Resolution authorities shall not adopt resolution plans where an entity is being wound up in accordance with the applicable national law pursuant to Article 32b or where Article 37(6) applies.;

deleted

Or. en

Amendment 198

Engin Eroglu

Proposal for a directive

Article 1 – paragraph 1 – point 7

Directive 2014/59/EU

Article 13 – paragraph 4

Text proposed by the Commission

Amendment

(7) in Article 13(4), the fourth subparagraph is replaced by the following:

deleted

‘

EBA may, at the request of a resolution authority, assist the resolution authorities in reaching a joint decision in accordance with Article 31(2), point (c), of Regulation (EU) No 1093/2010.;

’

Or. en

Amendment 199

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Article 1 – paragraph 1 – point 9 a (new)

Directive 2014/59/EU

Article 17 – paragraph 1

Present text

Amendment

(9a) in Article 17, paragraph 1 is replaced by the following:

1. Member States shall ensure that when, pursuant to an assessment of resolvability for an institution carried out in accordance with Articles 15 and 16, a resolution authority after consulting the competent authority determines that there are substantive impediments to the resolvability of that institution, the resolution authority shall notify in writing that determination to the institution concerned, to the competent authority and to the resolution authorities of the jurisdictions in which significant branches are located.

"1. Member States shall ensure that when, pursuant to an assessment of resolvability for an institution carried out in accordance with Articles 15 and 16, a resolution authority after consulting the competent authority determines that there are substantive impediments to the resolvability of that institution, the resolution authority shall notify in writing that determination to the institution concerned, to the competent authority and to the resolution authorities of the jurisdictions in which significant branches are located. The inability to provide any of the information required for the contents of the resolution plans under Article 10(7) to the satisfaction of the resolution authority shall be considered a substantive impediment to resolvability.

Or. en

(Directive 2014/59/EU)

Amendment 200

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Article 1 – paragraph 1 – point 8 a (new)

Directive 2014/59/EU

Article 16 a – paragraph 1 – introductory part

Present text

Amendment

(9a) In Article 16a(1), the introductory part is replaced by the following:

Article 16a

"Article 16a

Power to prohibit certain distributions

1. Where an entity is in a situation where it meets the combined buffer requirement when considered in addition to each of the requirements referred to in points (a), (b) and (c) of Article 141a(1) of Directive 2013/36/EU, but it fails to meet the combined buffer requirement when considered in addition to the requirements referred to in Articles 45c and 45d of this Directive, when calculated in accordance with point (a) of Article 45(2) of this Directive, the resolution authority of that entity shall have the power, in accordance with paragraphs 2 and 3 of this Article, to prohibit an entity from distributing more than the Maximum Distributable Amount related to the minimum requirement for own funds and eligible liabilities (‘M-MDA’), calculated in accordance with paragraph 4 of this Article, through any of the following actions:

1. Where an entity is in a situation where it meets the combined buffer requirement when considered in addition to each of the requirements referred to in points (a), (b) and (c) of Article 141a(1) of Directive 2013/36/EU, but it fails to meet the combined buffer requirement when considered in addition to the requirements referred to in Articles 45c and 45d of this Directive, when calculated in accordance with point (a) of Article 45(2) of this Directive, or where an entity fails to meet the requirements referred to in Articles 45c and 45d of this Directive, when calculated in accordance with point (b) of Article 45(2) of this Directive the resolution authority of that entity shall , in accordance with paragraphs 2 and 3 of this Article, prohibit an entity from distributing more than the Maximum Distributable Amount related to the minimum requirement for own funds and eligible liabilities (‘M-MDA’), calculated in accordance with paragraph 4 of this Article, through any of the following actions:

Or. en

(https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02014L0059-20221114)

Amendment 201

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Article 1 – paragraph 1 – point 9 b (new)

Directive 2014/59/EU

Article 17 – paragraph 4

Present text

Amendment

(9b) in Article 17(4), the second subparagraph is replaced by the following:

In identifying alternative measures, the resolution authority shall demonstrate how the measures proposed by the institution would not be able to remove the impediments to resolvability and how the alternative measures proposed are proportionate in removing them. The resolution authority shall take into account the threat to financial stability of those impediments to resolvability and the effect of the measures on the business of the institution, its stability and its ability to contribute to the economy.

"The resolution authority shall take into account the threat to financial stability of those impediments to resolvability and the effect of the measures on the business of the institution, its stability and its ability to contribute to the economy.

Or. en

(Directive 2014/59/EU)

Amendment 202

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Article 1 – paragraph 1 – point 10

Directive 2014/59/EU

Article 17 – paragraph 4 – subparagraphs 2 a (new) and 3

Text proposed by the Commission

Amendment

in Article 17(4), the following third subparagraph is added:

in Article 17(4), the following third and fourth subparagraphs are added:

The institution shall have the right to demonstrate how the measures it proposed would be able to remove the impediments to resolvability and how the alternative measures proposed by the authority are unnecessarily burdensome in removing them.

If the measures proposed by the entity concerned effectively reduce or remove the impediments to resolvability, the resolution authority shall take a decision, after consulting the competent authority. That decision shall indicate that the measures proposed effectively reduce or remove the impediments to resolvability and require the entity to implement the measures proposed.;

Or. en

Amendment 203

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Article 1 – paragraph 1 – point 10 a (new)

Directive 2014/59/EU

Article 17 – paragraph 5 – introductory part

Present text

Amendment

(10a) in Article 17, the introductory part of paragraph 5 is replaced by the following:

5. For the purposes of paragraph 4, resolution authorities shall have the power to take any of the following measures:

"5. For the purposes of paragraph 4, resolution authorities shall require the institution take any of the following measures within a specified timeframe:

Or. en

(Directive 2014/59/EU)

Amendment 204

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Article 1 – paragraph 1 – point 10 b (new)

Directive 2014/59/EU

Article 17 – paragraphs 8 a and 8 b (new)

Text proposed by the Commission

Amendment

(10b) in Article 17, paragraphs (8a) and (8b) are inserted:

"8a. Taking into account, where appropriate, experience acquired in the application of the guidelines referred to in paragraph 8, EBA shall develop draft regulatory technical standards to specify further details on the measures provided for in paragraph 5 and the circumstances in which each measure may be applied. EBA shall submit those draft regulatory technical standards to the Commission by [please insert 1 year after entry into force of the amended Directive.

Power is conferred on the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1093/2010.

8b. The resolution authority shall publish at the end of each resolution planning cycle an anonymised list with identified impediments including substantive impediments to resolvability and relevant actions to address them.

Or. en

(Directive 2014/59/EU)

Amendment 205

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Article 1 – paragraph 1 – point 11 – point -a (new)

Directive 2014/59/EU

Article 18 – paragraph 2 – subparagraph 1

Present text

Amendment

(-a) In Article 18 (2), the first sub-paragraph is replaced by the following:

2. The group-level resolution authority, in cooperation with the consolidating supervisor and EBA in accordance with Article 25(1) of Regulation (EU) No 1093/2010, shall prepare and submit a report to the Union parent undertaking, to the resolution authorities of subsidiaries, which shall provide it to the subsidiaries within their remit, and to the resolution authorities of jurisdictions in which significant branches are located. The report shall be prepared after consulting the competent authorities, and shall analyse the substantive impediments to the effective application of the resolution tools and the exercising of the resolution powers in relation to the group, and also in relation to resolution groups where a group is composed of more than one resolution group. The report shall consider the impact on the group's business model and recommend any proportionate and targeted measures that, in the view of the group-level resolution authority, are necessary or appropriate to remove those impediments.

"2. The group-level resolution authority, in cooperation with the consolidating supervisor and EBA in accordance with Article 25(1) of Regulation (EU) No 1093/2010, shall prepare and submit a report to the Union parent undertaking, to the resolution authorities of subsidiaries, which shall provide it to the subsidiaries within their remit, and to the resolution authorities of jurisdictions in which significant branches are located. The report shall be prepared after consulting the competent authorities, and shall analyse the substantive impediments to the effective application of the resolution tools and the exercising of the resolution powers in relation to the group, and also in relation to resolution groups where a group is composed of more than one resolution group. The report shall consider the impact on the group's business model and recommend any proportionate and targeted measures that, in the view of the group-level resolution authority, are appropriate to remove those impediments.

Or. en

(https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02014L0059-20221114)

Amendment 206

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Article 1 – paragraph 1 – point 11 – point a a (new)

Directive 2014/59/EU

Article 18 – paragraph 3 – subparagraph 1

Present text

Amendment

(aa) in paragraph 3, the first sub-paragraph is replaced by the following:

Within four months of the date of receipt of the report, the Union parent undertaking may submit observations and propose to the group-level resolution authority alternative measures to remedy the impediments identified in the report.

"Within three months of the date of receipt of the report, the Union parent undertaking may submit observations and propose to the group-level resolution authority alternative measures to remedy the impediments identified in the report.

Or. en

(https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02014L0059-20221114)

Amendment 207

Gilles Boyer, Stéphanie Yon-Courtin

Proposal for a directive

Article 1 – paragraph 1 – point 12

Directive 2014/59/EU

Article 27 – paragraph 1 – subparagraph 1 – introductory part

Text proposed by the Commission

Amendment

Member States shall ensure that competent authorities may apply early intervention measures where an institution or entity referred to in Article 1(1), points (b), (c) or (d) meets any of the following conditions:

Member States shall ensure that competent authorities consider without undue delay, and if necessary adopt swiftly, early intervention measures where an institution or entity referred to in Article 1(1), points (b), (c) or (d) meets any of the following conditions:

Or. en

Justification

This proposal aims at ensuring that the EIM framework is embedded in a governance process that is swift and efficient as well as tilted towards the adoption of the decisions that will best preserve capital and MREL resources, in order not to hinder a possible resolution at a later stage.

Amendment 208

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Article 1 – paragraph 1 – point 12

Directive 2014/59/EU

Article 27 – paragraph 1 – introductory part

Text proposed by the Commission

Amendment

Member States shall ensure that competent authorities apply early intervention measures where an institution or entity referred to in Article 1(1), points (b), (c) or (d) meets any of the following conditions:

Or. en

Amendment 209

Roberts Zīle

Proposal for a directive

Article 1 – paragraph 1 – point 12

Directive 2014/59/EU

Article 27 – paragraph 1 – subparagraph 1 – point a – point ii

Text proposed by the Commission

Amendment

(ii) the competent authority deems that remedial actions other than early intervention measures are insufficient to address the problems due inter alia to a rapid and significant deterioration of the financial condition of the institution or entity;

(ii) the competent authority deems that remedial actions other than early intervention measures are insufficient to address the problems

Or. en

Justification

The possibility of the supervisor to act accordingly might be therefore unduly limited

Amendment 210

Pedro Marques, René Repasi, Aurore Lalucq

Proposal for a directive

Article 1 – paragraph 1 – point 12

Directive 2014/59/EU

Article 27 – paragraph 1 – subparagraph 1 – point a – point ii

Text proposed by the Commission

Amendment

(ii) the competent authority deems that remedial actions other than early intervention measures are insufficient to address the problems due inter alia to a significant deterioration of the financial condition of the institution or entity;

Or. en

Amendment 211

Gilles Boyer, Stéphanie Yon-Courtin

Proposal for a directive

Article 1 – paragraph 1 – point 12

Directive 2014/59/EU

Article 27 – paragraph 1 – subparagraph 1 – point b

Text proposed by the Commission

Amendment

(b) the institution or entity infringes or is likely to infringe in the 12 months following the assessment of the competent authority the requirements laid down in Title II of Directive 2014/65/EU, in Articles 3 to 7, Articles 14 to 17, or Articles 24, 25 and 26 of Regulation (EU) No 600/2014, or in Articles 45e or 45f of this Directive. Where appropriate to characterise such infringement, Member States shall ensure that the resolution authority informs the competent authority without delay.

Or. en

Justification

Amendment 212

Fabio Massimo Castaldo

Proposal for a directive

Article 1 – paragraph 1 – point 12

Directive 2014/59/EU

Article 27 – paragraph 1a

Text proposed by the Commission

Amendment

(d) the requirement to change the legal structure of the institution;

deleted

Or. en

Amendment 213

Marco Zanni, Valentino Grant, Antonio Maria Rinaldi

Proposal for a directive

Article 1 – paragraph 1 – point 12

Directive 2014/59/EU

Article 27 – paragraph 1a – point d

Text proposed by the Commission

Amendment

(d) the requirement to change the legal structure of the institution;

deleted

Or. en

Amendment 214

Marco Zanni, Valentino Grant, Antonio Maria Rinaldi

Proposal for a directive

Article 1 – paragraph 1 – point 12

Directive 2014/59/EU

Article 27 – paragraph 1 a – point f a (new)

Text proposed by the Commission

Amendment

(fa) the requirement for the management body to contact potential purchasers and to put in place a digital platform for sharing the information that is necessary for the marketing of the institution or entity referred to in Article 1(1), points (b), (c) or (d) with potential purchasers or with advisors and valuers in order to prepare for the resolution of that institution or entity, subject to the conditions laid down in Article 39(2) and the confidentiality provisions laid down in Article 84.

Or. en

Amendment 215

Pedro Marques, René Repasi, Aurore Lalucq, Irene Tinagli, Jonás Fernández

Proposal for a directive

Article 1 – paragraph 1 – point 12

Directive 2014/59/EU

Article 27 – paragraph 1 a – point f a (new)

Text proposed by the Commission

Amendment

(fa) the requirement for the management body of the entity to draw up a plan that the entity can implement in case the relevant corporate body decides to initiate the voluntary wind-down of the entity; the plan shall include at least analyses of the necessary capital and liquidity support for winding down and of the concrete relevant strategic options for a possible market exit.

Or. en

Amendment 216

Roberts Zīle

Proposal for a directive

Article 1 – paragraph 1 – point 12

Directive 2014/59/EU

Article 27 – paragraph 1 a – point f a (new)

Text proposed by the Commission

Amendment

Or. en

Amendment 217

Gilles Boyer, Stéphanie Yon-Courtin

Proposal for a directive

Article 1 – paragraph 1 – point 12

Directive 2014/59/EU

Article 27 – paragraph 3

Text proposed by the Commission

Amendment

3. For each of the measures referred to in paragraph 1a, competent authorities shall set a deadline that is appropriate for completion of that measure and that enables the competent authority to evaluate its effectiveness. The evaluation of the measure shall be carried out immediately after the deadline is reached and shared with the resolution authority. Should the evaluation conclude that the measures have not been fully implemented or are not effective, the competent authority shall make an assessment of the condition referred to in Article 32(1), point (a) of this Directive, after having consulted the resolution authority.

Or. en

Justification

Amendment 218

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Article 1 – paragraph 1 – point 12

Directive 2014/59/EU

Article 27 – paragraph 4

Text proposed by the Commission

Amendment

4. EBA shall, by … [PO please insert the date = 12 months from the date of entry into force of this amending Directive], issue guidelines in accordance with Article 16 of Regulation (EU) No 1093/2010 to promote the consistent application of the triggers referred to in paragraph 1 of this Article.

4. EBA shall, by … [PO please insert the date = 12 months from the date of entry into force of this amending Directive], issue draft regulatory technical standards in order to specify a minimum set of triggers for the use of the measures referred to in paragraph 1 of this Article.

Such triggers shall in particular take into account a rapidly deteriorating financial condition of an institution, including deteriorating liquidity situation, increasing level of leverage, non-performing loans or concentration of exposures, and include the institution’s own funds requirement plus at least 1,5 percentage points.

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1093/2010.

Or. en

Amendment 219

Pedro Marques, René Repasi, Aurore Lalucq, Jonás Fernández

Proposal for a directive

Article 1 – paragraph 1 – point 15

Directive 2014/59/EU

Article 30 a – paragraph 1 – subparagraph 1 – point a

Text proposed by the Commission

Amendment

(a) any of the measures referred to in Article 104(1) of Directive 2013/36/EU they require an institution or an entity referred to in Article 1(1), points (b), (c) or (d), of this Directive to take ;

(a) any of the measures referred to in Article 104(1) of Directive 2013/36/EU they require an institution or an entity referred to in Article 1(1), points (b), (c) or (d), of this Directive to take that aim to address a deterioration in the situation of those entities and groups;

Or. en

Amendment 220

Pedro Marques, René Repasi, Aurore Lalucq

Proposal for a directive

Article 1 – paragraph 1 – point 15

Directive 2014/59/EU

Article 30 a – paragraph 1 – subparagraph 2

Text proposed by the Commission

Amendment

Competent authorities shall closely monitor, in cooperation with the resolution authorities, the situation of the institution or entity and their compliance with the measures referred to in the first subparagraph, point (a), that aim to address a deterioration in the situation of that institution or entity and with the early intervention measures referred to in the first subparagraph, point (c).

Competent authorities shall closely monitor, in close cooperation with the resolution authorities, the situation of the institution or entity and their compliance with the measures referred to in the first subparagraph, point (a), that aim to address a deterioration in the situation of that institution or entity and with the early intervention measures referred to in the first subparagraph, point (c).

Or. en

Amendment 221

Herbert Dorfmann, Othmar Karas, Markus Ferber

Proposal for a directive

Article 1 – paragraph 1 – point 15

Directive 2014/59/EU

Article 30 a – paragraph 2 – subparagraph 1 – introductory part

Text proposed by the Commission

Amendment

Competent authorities shall notify resolution authorities as early as possible where they consider that there is a material risk that one or more of the circumstances in Article 32(4) would apply in relation to an institution or an entity referred to Article 1(1), points (b), (c) or (d). That notification shall contain:

Without legal effect to any alternative private sector measure, including measures by an IPS, that would prevent the failure or the likely failure of the institution within a reasonable timeframe, competent authorities shall notify resolution authorities as early as possible where they consider that there is a material risk that an institution will fail according to Article 32(4) would apply in relation to an institution or an entity referred to Article 1(1), points (b), (c) or (d). That notification shall contain:

Or. en

Justification

Even if Art. 30a (2) BRRD may only be intended to ensure early communication between the competent authority and the resolution authority, there is a risk that it will be misinterpreted as having binding effects with regard to private sector measures and as potentially triggering state aid classification.

Amendment 222

Engin Eroglu

Proposal for a directive

Article 1 – paragraph 1 – point 15

Directive 2014/59/EU

Article 30 a – paragraph 2 – subparagraph 1 – introductory part

Text proposed by the Commission

Amendment

Competent authorities shall - without legal effect to any alternative private sector measure, including measures by an IPS, that would prevent the failure or the likely failure of the institution within a reasonable timeframe - notify resolution authorities as early as possible where they consider that there is a material risk that an institution will fail according to Article 32(4) would apply (…). That notification shall contain:

Or. en

Justification

There is a risk that it will be misinterpreted as having binding effects with regard to private sector measures and as potentially triggering state aid classification, even if Art. 30a (2) BRRD may only be intended to ensure early communication between the competent authority and the resolution authority.

Amendment 223

Engin Eroglu

Proposal for a directive

Article 1 – paragraph 1 – point 15

Directive 2014/59/EU

Article 30 a – paragraph 2 – subparagraph 1 – point b

Text proposed by the Commission

Amendment

(b) an overview of the measures which would prevent the failure of the institution or entity within a reasonable timeframe, their expected impact on the institution or entity as regards the circumstances referred to in Article 32(4) and the expected timeframe for the implementation of those measures.

(b) a non-binding and non-complete overview of the measures which would prevent the failure of the institution or entity within a reasonable timeframe, their expected impact on the institution or entity as regards the circumstances referred to in Article 32(4) and the expected timeframe for the implementation of those measures.

Or. en

Amendment 224

Herbert Dorfmann, Othmar Karas

Proposal for a directive

Article 1 – paragraph 1 – point 15

Directive 2014/59/EU

Article 30 a – paragraph 2 – subparagraph 1 – point b

Text proposed by the Commission

Amendment

(b) a non-binding and non-exhaustive overview of the measures which would prevent the failure of the institution or entity within a reasonable timeframe, their expected impact on the institution or entity as regards the circumstances referred to in Article 32(4) and the expected timeframe for the implementation of those measures.

Or. en

Justification

Amendment 225

Markus Ferber

Proposal for a directive

Article 1 – paragraph 1 – point 15

Directive 2014/59/EU

Article 30 a – paragraph 2 – subparagraph 1 – point b

Text proposed by the Commission

Amendment

(b) a non-binding overview of the measures which would prevent the failure of the institution or entity within a reasonable timeframe, their expected impact on the institution or entity as regards the circumstances referred to in Article 32(4) and the expected timeframe for the implementation of those measures.

Or. en

Amendment 226

Engin Eroglu

Proposal for a directive

Article 1 – paragraph 1 – point 15

Directive 2014/59/EU

Article 30 a – paragraph 2 – subparagraph 2

Text proposed by the Commission

Amendment

After having received the notification referred to in the first subparagraph, resolution authorities shall assess, in close cooperation with competent authorities, what constitutes a reasonable timeframe for the purposes of the assessment of the condition referred to in Article 32(1), point (b), taking into account the speed of the deterioration of the conditions of the institution or entity referred to in Article 1(1), points (b), (c) or (d), the need to implement effectively the resolution strategy and any other relevant considerations. Resolution authorities shall communicate that assessment to competent authorities as early as possible. The notification referred to in the first subparagraph does not impact the ability of institutional protection schemes to implement any measures. Any decisions relating to measures by an institutional protection scheme are within the sole discretion of the institutional protection scheme.

Or. en

Amendment 227

Luděk Niedermayer

Proposal for a directive

Article 1 – paragraph 1 – point 15

Directive 2014/59/EU

Article 30 a – paragraph 2 – subparagraph 2

Text proposed by the Commission

Amendment

After having received the notification referred to in the first subparagraph, resolution authorities shall assess, in close cooperation with competent authorities, what constitutes a reasonable timeframe for the purposes of the assessment of the condition referred to in Article 32(1), point (b). Resolution authorities should take into account the speed of the deterioration of the conditions of the institution or entity referred to in Article 1(1), points (b), (c) or (d), the potential impact on the financial system and protection of depositors and client funds, need to implement effectively the resolution strategy and any other relevant considerations. Resolution authorities shall communicate that assessment to competent authorities as early as possible.

Or. en

Amendment 228

Marco Zanni, Valentino Grant, Antonio Maria Rinaldi

Proposal for a directive

Article 1 – paragraph 1 – point 15

Directive 2014/59/EU

Article 30 a – paragraph 2 – subparagraph 2

Text proposed by the Commission

Amendment

After having received the notification referred to in the first subparagraph, resolution authorities shall assess, in close cooperation with competent authorities, what constitutes a reasonable timeframe for the purposes of the assessment of the condition referred to in Article 32(1), point (b), taking into account the speed of the deterioration of the conditions of the institution or entity referred to in Article 1(1), points (b), (c) or (d), the risk that a prolonged process increases the overall costs for customers and the economy, the need to implement effectively the resolution strategy and any other relevant considerations. Resolution authorities shall communicate that assessment to competent authorities as early as possible.

Or. en

Amendment 229

Markus Ferber, Herbert Dorfmann

Proposal for a directive

Article 1 – paragraph 1 – point 15

Directive 2014/59/EU

Article 30 a – paragraph 2 – subparagraph 2 a (new)

Text proposed by the Commission

Amendment

The notification referred to in the first subparagraph shall not constrain the ability of institutional protection schemes to implement measures. Decisions relating to any measures by an institutional protection scheme shall remain under the sole discretion of the institutional protection scheme.

Or. en

Amendment 230

Roberts Zīle

Proposal for a directive

Article 1 – paragraph 1 – point 15

Directive 2014/59/EU

Article 30 a – paragraph 2 – subparagraph 3

Text proposed by the Commission

Amendment

Following the notification referred to in the first subparagraph, competent authorities and resolution authorities shall, in close cooperation, monitor the situation of the institution or entity referred to in Article 1(1), points (b), (c) or (d), the implementation of the any relevant measures within their expected timeframe and any other relevant developments. For that purpose, resolution authorities and competent authorities shall meet regularly, with a frequency set by resolution authorities considering the circumstances of the case. Competent authorities and resolution authorities shall provide each other with any relevant information without delay.

Following the notification referred to in the first subparagraph, competent authorities shall monitor the situation of the institution or entity referred to in Article 1(1), points (b), (c) or (d), the implementation of the any relevant measures within their expected timeframe and any other relevant developments. For that purpose, resolution authorities and competent authorities shall meet regularly, with a frequency set by resolution authorities considering the circumstances of the case. Competent authorities and resolution authorities shall provide each other with any relevant information without delay.

Or. en

Amendment 231

Pedro Marques, René Repasi, Aurore Lalucq, Jonás Fernández

Proposal for a directive

Article 1 – paragraph 1 – point 15

Directive 2014/59/EU

Article 30 a – paragraph 2 – subparagraph 3

Text proposed by the Commission

Amendment

Following the notification referred to in the first subparagraph, competent authorities shall, in close cooperation with resolution authorities, monitor the situation of the institution or entity referred to in Article 1(1), points (b), (c) or (d), the implementation of the any relevant measures within their expected timeframe and any other relevant developments. For that purpose, resolution authorities and competent authorities shall meet regularly, with a frequency set by resolution authorities considering the circumstances of the case. Competent authorities and resolution authorities shall provide each other with any relevant information without delay.

Or. en

Amendment 232

Engin Eroglu

Proposal for a directive

Article 1 – paragraph 1 – point 15

Directive 2014/59/EU

Article 30 a – paragraph 2 – subparagraph 3 a (new)

Text proposed by the Commission

Amendment

Any measure in the context of preparing for resolution as referred to in this paragraph must not hinder preventive measures as referred to in Article 11(3) of Directive 2014/49/EU. Preventive measures should be given priority over resolution measures.

Or. en

Justification

There is a risk that the obligation to earlier cooperation between the competent supervisory authorities and the resolution authority proposed under Article 30a BRRD draft would influence preventive measures in a negative way. At the very least, preventive measures must be given priority over resolution measures as a matter of principle, as this is a sector-specific stabilisation solution without burdening the banking industry as a whole.

Amendment 233

Herbert Dorfmann, Othmar Karas, Markus Ferber

Proposal for a directive

Article 1 – paragraph 1 – point 15

Directive 2014/59/EU

Article 30 a – paragraph 4 – introductory part

Text proposed by the Commission

Amendment

4. The powers of resolution authorities shall include the power to market to potential purchasers, or make arrangements for such marketing, the institution or entity referred to in Article 1(1), points (b), (c) or (d), to potential purchasers, or require the institution or entity to do so, for the following purposes:

4. Subject to alternative private sector measures, including measures by an IPS, that would prevent the failure or the likely failure of the institution within a reasonable timeframe, the powers of resolution authorities shall include the power to market to potential purchasers, or make arrangements for such marketing, the institution or entity referred to in Article 1(1), points (b), (c) or (d), to potential purchasers, or require the institution or entity to do so, for the following purposes:

Or. en

Justification

Art. 30a (4) BRRD draft completely disregards any support measures or measures to avert a default by an IPS if the resolution authority is already authorized to market an institution to potential acquirers or to make arrangements in this respect in preparation for resolution or if the authority can demand this from the institution.

Amendment 234

Engin Eroglu

Proposal for a directive

Article 1 – paragraph 1 – point 15

Directive 2014/59/EU

Article 30 a – paragraph 4 – introductory part

Text proposed by the Commission

Amendment

4. Subject to alternative private sector measures, including measures by an IPS, preventing the failure or the likely failure of the institution within a reasonable timeframe, the powers of resolution authorities shall include the power to market to potential purchasers, or make arrangements for such marketing, the institution or entity referred to in Article 1(1), points (b), (c) or (d), to potential purchasers, or require the institution or entity to do so, for the following purposes:

Or. en

Justification

Art. 30a (4) BRRD draft completely ignores any support measures or measures to avoid a default by an IPS if the resolution authority is already authorized to market an institution to possible acquirers or to make arrangements in this respect in preparation for resolution or if the authority can demand this from the institution.

Amendment 235

Pedro Marques, René Repasi, Aurore Lalucq, Jonás Fernández

Proposal for a directive

Article 1 – paragraph 1 – point 15

Directive 2014/59/EU

Article 30 a – paragraph 4 a (new)

Text proposed by the Commission

Amendment

4a. Where, in the use of the power referred to in paragraph 4, the resolution authority decides to directly market to potential purchasers, it shall have due regard to the circumstances of the case and the potential impact that the exercise of that power might have on the entity's overall position;

Or. en

Amendment 236

Pedro Marques, René Repasi, Aurore Lalucq

Proposal for a directive

Article 1 – paragraph 1 – point 15

Directive 2014/59/EU

Article 30 a – paragraph 5

Text proposed by the Commission

Amendment

5. For the purposes of the paragraph 4, resolution authorities shall have the power to request the institution or entity referred to in Article 1(1), points (b), (c) or (d), to put in place a digital platform for sharing the information that is necessary for the marketing of that institution or entity with potential purchasers or with advisors and valuers engaged by the resolution authority.

Or. en

Amendment 237

Martin Schirdewan

Proposal for a directive

Article 1 – paragraph 1 – point 15

Directive 2014/59/EU

Article 30 a – paragraph 8 – subparagraph 2

Text proposed by the Commission

Amendment

Competent authorities and resolution authorities shall ensure that those measures and actions are consistent, coordinated and effective.;

Competent authorities and resolution authorities shall ensure that those measures and actions are consistent, coordinated and effective. The provisions of this Article shall not prejudice the proper functioning of national institutional protection schemes. Member States may decide to exempt national institutional protection schemes from the requirements of this Article.

Or. en

Amendment 238

Eero Heinäluoma

Proposal for a directive

Article 1 – paragraph 1 – point 16

Directive 2014/59/EU

Article 31– paragraph 2 – point c

Text proposed by the Commission

Amendment

(c) to protect public funds by minimising reliance on extraordinary public financial support, in particular when provided from the budget of a Member State;

Or. en

Amendment 239

Ernest Urtasun

on behalf of the Verts/ALE Group

Proposal for a directive

Article 1 – paragraph 1 – point 16

Directive 2014/59/EU

Article 31 – paragraph 2 – point c

Text proposed by the Commission

Amendment

(c) to protect public funds by minimising reliance on extraordinary public financial support, in particular when provided from the budget of a Member State;

Or. en

Amendment 240

Markus Ferber, Herbert Dorfmann

Proposal for a directive

Article 1 – paragraph 1 – point 16

Directive 2014/59/EU

Article 31 – paragraph 2 – point c

Text proposed by the Commission

Amendment

(c) to protect public funds by minimising reliance on extraordinary public financial support, in particular when provided from the budget of a Member State;

Or. en

Amendment 241

Engin Eroglu

Proposal for a directive

Article 1 – paragraph 1 – point 16

Directive 2014/59/EU

Article 31 – paragraph 2 – point c

Text proposed by the Commission

Amendment

(c) to protect public funds by minimising reliance on extraordinary public financial support, in particular when provided from the budget of a Member State;

Or. en

Amendment 242

Gilles Boyer, Stéphanie Yon-Courtin

Proposal for a directive

Article 1 – paragraph 1 – point 16

Directive 2014/59/EU

Article 31 – paragraph 2 – point d

Text proposed by the Commission

Amendment

(d) to protect depositors, while minimising losses for deposit guarantee schemes, and to protect investors covered by Directive 97/9/EC;;

(d) to protect covered deposits, and to the extent possible also that uncovered part of eligible deposits from natural persons and micro, small and medium-sized enterprises, while minimising losses for deposit guarantee schemes, and to protect investors covered by Directive 97/9/EC;;

Or. en

Justification

As regards resolution objectives, larger corporates should not be better treated than other clients, whose funds and assets are already protected by point (e) of Article 31(2). It is therefore suggested to restrict the resolution objective to the protection of retail depositors as defined in current Article 108 BRRD. In addition, it is important to maintain the objective to minimise losses for deposit guarantee schemes, which is key to ensure the limitation of external support to the strict minimum and the economic efficiency of the resolution process.

Amendment 243

Pedro Marques, René Repasi, Aurore Lalucq, Irene Tinagli, Jonás Fernández

Proposal for a directive

Article 1 – paragraph 1 – point 16

Directive 2014/59/EU

Article 31 –paragraph 2 – point d

Text proposed by the Commission

Amendment

(d) to protect depositors, while minimising losses for deposit guarantee schemes, and to protect investors covered by Directive 97/9/EC;;

(d) to protect depositors and to protect investors covered by Directive 97/9/EC;;

Or. en

Amendment 244

Marco Zanni, Valentino Grant, Antonio Maria Rinaldi

Proposal for a directive

Article 1 – paragraph 1 – point 16

Directive 2014/59/EU

Article 31 – paragraph 2 – point d

Text proposed by the Commission

Amendment

(d) to protect depositors, while minimising losses for deposit guarantee schemes, and to protect investors covered by Directive 97/9/EC;;

(d) to protect depositors and to protect investors covered by Directive 97/9/EC;;

Or. en

Amendment 245

Joachim Schuster

Proposal for a directive

Article 1 – paragraph 1 – point 16

Directive 2014/59/EU

Article 31 – paragraph 2 – point d

Text proposed by the Commission

Amendment

(d) to protect depositors, while minimising losses for deposit guarantee schemes, and to protect investors covered by Directive 97/9/EC;;

(d) to protect depositors covered by Directive 2014/49/EU and investors covered by Directive 97/9/EC;;

Or. en

Amendment 246

Esther de Lange

Proposal for a directive

Article 1 – paragraph 1 – point 16

Directive 2014/59/EU

Article 31– paragraph 2 – point d

Text proposed by the Commission

Amendment

(d) to protect depositors, while minimising losses for deposit guarantee schemes, and to protect investors covered by Directive 97/9/EC;;

(d) to protect depositors covered by Directive 2014/49/EU and investors covered by Directive 97/9/EC;;

Or. en

Justification

Although the goal of protecting DGS-funds is supported, minimizing losses to the DGS should not be a resolution objective on itself and it is doubtful whether this provision has the intended effect. By including the protection of DGS-funds the LCT will become too decisive for the outcome of the PIA. The cost for the DGS is and should not the primary source of public interest in resolving a bank.

Amendment 247

Engin Eroglu

Proposal for a directive

Article 1 – paragraph 1 – point 16

Directive 2014/59/EU

Article 31 – paragraph 2 – point d

Text proposed by the Commission

Amendment

(d) to protect depositors, while minimising losses for deposit guarantee schemes, and to protect investors covered by Directive 97/9/EC;;

(d) to protect depositors covered by Directive 2014/49/EU and to protect investors covered by Directive 97/9/EC;

Or. en

Justification

The draft amendment of Art. 31 (2) point (d) BRRD deletes the reference to the Deposit Guarantee Scheme Directive 2014/49/EU with the consequence that in future the protection of all deposits should be the objective of resolution. However, this is not necessary, as deposits not protected by the deposit guarantee scheme are also regularly given sufficient protection in insolvency proceedings. According to the explanatory memorandum in the legislative proposal, the insertion of "while minimizing losses" should have the consequence that resolution is always a priority if insolvency would cause higher costs. Although it is welcome that the losses of deposit guarantee schemes are supposed to remain in control, the ultimate intention behind the insertion is rejected.

Amendment 248

Markus Ferber, Herbert Dorfmann

Proposal for a directive

Article 1 – paragraph 1 – point 16

Directive 2014/59/EU

Article 31 – paragraph 2 – point d

Text proposed by the Commission

Amendment

(d) to protect depositors, while minimising losses for deposit guarantee schemes, and to protect investors covered by Directive 97/9/EC;;

(d) to protect depositors covered by Directive 2014/49/EU and investors covered by Directive 97/9/EC;;

Or. en

Justification

The protection should only encompass covered deposits to avoid moral hazard.

Amendment 249

Marco Zanni, Valentino Grant, Antonio Maria Rinaldi

Proposal for a directive

Article 1 – paragraph 1 – point 16 a (new)

Directive 2014/59/EU

Article 31 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

(16a) in Article 31 the following paragraph 2a is added:

"2a. Subject to different provisions of this Directive, the resolution objectives are of equal significance, and resolution authorities shall balance them as appropriate to the nature and circumstances of each case. For the purposes of Article 32(5), the objectives of preserving financial stability and protecting depositors pursuant to points (b) and (d) of paragraph 2, respectively, shall be deemed to be more significant than other resolution objectives.";

Or. en