- Question ID
-
2024_7141
- Legal act
- Regulation (EU) No 575/2013 (CRR)
- Topic
- Credit risk
- Article
-
128
- Paragraph
-
1
- Subparagraph
-
c
- COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
- Not applicable
- Article/Paragraph
-
/
- Type of submitter
-
Investment firm
- Subject matter
-
Scope of Subordinated Debt Exposures under Art. 128 (1)(c)
- Question
-
Which bonds can be considered "subordinated debt" under Art. 128 (c)? Only senior non-preferred bonds? Senior Non-Preferred Bonds and Senior Preferred Bonds (which meet the criteria under Art. 72b(3)? Senior Non-Preferred Bonds and Senior Preferred Bonds (that meet the criteria set out in Art. 72b(3) and are recognized as eligible liabilities by the resolution authority)? Senior Non-Preferred Bonds and Senior Preferred Bonds issued by G-SII entities (which meet the criteria set out in Art. 72b(3) and are recognised by the resolution authority as eligible liabilities)?
- Background on the question
-
The amendment to the CRR introduces a new exposure class ("Subordinated Debt Exposures"). Subparagraph (c) refers to "the conditions set out in Article 72b" of the CRR. This article sets out the requirements for financial instruments to qualify as eligible liabilities. As such, senior non-preferred bonds may meet these conditions, as may senior preferred bonds pursuant to Art. 72b(3). For these bonds, the question arises as to whether only those bonds that are permitted by the resolution authority to qualify as eligible liabilities instruments meet the conditions, or whether all bonds that meet the criteria, regardless of whether they are permitted by the resolution authority, are within the scope.
- Submission date
- Status
-
Question under review
- Answer prepared by
-
Answer prepared by the EBA.
