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Q&As refer to the provisions in force on the day of their publication. The EBA does not systematically review published Q&As following the amendment of legislative acts. Users of the Q&A tool should therefore check the date of publication of the Q&A and whether the provisions referred to in the answer remain the same.

Please note that the Q&As related to the supervisory benchmarking exercises have been moved to the dedicated handbook page. You can submit Q&As on this topic here.

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List of Q&A's

Intra-group financial support with regard to third countries

Why does Article 19 (1) of Directive No 2014/59/EU (BRRD) include third countries and how is the procedure of granting intra-group financial support supposed to work regarding third countries?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1799
  • Topic: Intra-group financial support
  • Date of submission:
  • Published as final Q&A: 06/02/2015

Use of the resolution fund

Are the purposes for which a resolution fund can be used exhaustive according to Article 101 of Directive 2014/59/EU (BRRD)?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1797
  • Topic: Resolution financing arrangements
  • Date of submission:
  • Published as final Q&A: 06/02/2015

Resolution action with regard to a holding

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

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1796
  • Topic: Resolution objectives and triggers
  • Date of submission:

De Minimis and weighting for foreign exchange risk

Should the own fund requirement of foreign-currency option non-delta risk be calculated by all institutions, or only if the net open FX position is greater than 2%?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 528/2014 - RTS on non-delta risk of options in the standardised market risk approach
  • ID: 2015_1795
  • Topic: Market risk
  • Date of submission:
  • Published as final Q&A: 17/07/2015

Meaning of "initial" recovery plan

What does the reference to the ‘initial’ recovery plan’ in Article 27(1)(a) of Directive 2014/59/EU (BRRD) mean? Is it the first recovery plan or does it relate to subsequent recovery plans?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1794
  • Topic: Early intervention
  • Date of submission:
  • Published as final Q&A: 06/02/2015

Differences between proportionality in the CRD IV and Simplified obligations in the BRRD.

In accordance with the Directive 2014/59/EU (BRRD), Article 74(4) of CRD IV will expire when BRRD is implemented. Is the proportionality in the CRD IV different from the simplified obligations in the BRRD?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1793
  • Topic: Interactions with the CRR / CRD IV and the BRRD
  • Date of submission:
  • Published as final Q&A: 06/02/2015

Recognition of additional credit protection in the regulatory LGD

It is not clear whether an institution with an IRB Approach permission (Foundation Approach; PD models only) should notify the competent authorities in accordance with Article 143 if they want to recognise additional credit protection in the regulatory LGD in accordance with Article 161(1).

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 529/2014 - RTS on materiality of extensions and changes in the advanced approaches (IRB and AMA)
  • ID: 2015_1792
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 19/06/2015

Market making prior to 5 years from issuance of AT1-/T2-Instruments – follow up of Q&A 2013_290

In the case of a repurchase of own funds instruments for market making pur-poses, competent authorities may give their permission in advance in order to reduce own funds for a certain predetermined amount within the limits laid down in Article 29(3) of Regulation (EU) No 241/2014 (RTS on own funds part 1 and 2). However, the RTS does not specify when market making can take place. Thus, clarification is sought whether repurchases for market making purposes are permissible before five years after the date of issuance provided that the conditions stipulated by the RTS are met.

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 241/2014 - RTS for Own Funds requirements for institutions
  • ID: 2015_1791
  • Topic: Own funds
  • Date of submission:

Notification of stakeholders in the context of intra-group financial support

What is the scope of the obligations imposed by Articles 25(1) and 25(6) of Directive 2014/59/EU (BRRD)?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1789
  • Topic: Intra-group financial support
  • Date of submission:
  • Published as final Q&A: 06/02/2015

Simplified obligations regarding recovery and resolution plans for a subsidiary constituting a significant share in the financial system of a Member State

Is a competent authority in charge of the supervision of a subsidiary constituting a significant share in the financial system of their Member State (according to paragraph 10 of Article 4 Directive 2014/59/EU (BRRD), to submit that request during the process of the assessment of group recovery plans if they want that subsidiary (part of the EU group with parent institution in another Member State) to draw up and submit a recovery plan on an individual basis, required (according to Article 7. paragraph 2) in order for that fact to form part of the joint decision regarding the group recovery plan or is the competent authority allowed to require individual plans to be drawn up independently from joint decision process prescribed in Article 8 of the BRRD? Is a resolution authority in charge of a subsidiary constituting a significant share in the financial system of their Member State (according to Article 4(10) of the BRRD ), if they want to prepare individual resolution plan for that subsidiary (part of the EU group with parent institution in another Member State), allowed to define topics of the resolution plan such as resolution strategy, measures to remove impediments to that strategy and MREL for that particular subsidiary separately from the joint decision process defined in Articles 13, 16, 18 and 45h of the Directive 2014/59/EU (BRRD)?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1788
  • Topic: Simplified obligations
  • Date of submission:
  • Published as final Q&A: 06/02/2015

Relation between the sale of business tool and take-over bid requirements

Does the reference to 'securities law' in Article 38(1) of Directive 2014/59/EU (BRRD) relate to take-over bid requirements? In general, what is the approach to the exemption to apply securities law requirements? For example, in case of bail-in in for the conversion into capital instruments an alternative in given, and therefore the investor has to decide between two instruments but the conversion is mandatory, could the obligation of prospectus be overridden? The same for a capital increase with pre-emption rights?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1787
  • Topic: Resolution tools and powers
  • Date of submission:
  • Published as final Q&A: 06/02/2015

Resolution powers in relation to third country branches

Article 96 of Directive 2014/59/EU (BRRD) requires Member States to ensure resolution authorities have the powers necessary to act in relation to a third country branch. How can Member States comply with this requirement? What specific actions should the resolution authority be empowered to take in relation to a third country branch? How can a resolution authority take action against a branch given it is not a legal entity?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1786
  • Topic: Cross-border resolution
  • Date of submission:
  • Published as final Q&A: 06/02/2015

Approval of business reorganisation plan

Does only the resolution authority have to be satisfied of the business reorganisation plan referred to in Article 52(7)(8) of Directive 2014/59/EU (BRRD) or is the support of the competent authority required also?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1785
  • Topic: Resolution tools and powers
  • Date of submission:
  • Published as final Q&A: 06/02/2015

Deposit Guarantee Scheme (DGS) contributions couning towards the 8% requirement

On what basis is the 8% in Article 44(5) of Directive 2014/59/EU (BRRD) to be applied? Do Deposit Guarantee Scheme (DGS) contributions count towards the 8% requirement?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1784
  • Topic: Resolution tools and powers
  • Date of submission:
  • Published as final Q&A: 06/02/2015

Transfer of rights and liabilities in the context of the Asset Separation Tool

Can you clarify if there is a distinction between Article 42(1) and Article 42(3) of Directive 2014/59/EU (BRRD): does the assets separation tool allow Resolution Authorities to transfer rights and liabilities as well as assets?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1783
  • Topic: Resolution tools and powers
  • Date of submission:
  • Published as final Q&A: 06/02/2015

Transfer of assets / Consideration paid by the purchaser

On the basis of Article 39(1) and 38(4)(b) of Directive 2014/59/EU (BRRD), where assets of the holding company are transferred, should the consideration paid by the purchaser benefit the holding, and not the institution under resolution?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1782
  • Topic: Resolution tools and powers
  • Date of submission:
  • Published as final Q&A: 06/02/2015

Transfer of shareholders in the context of sale of business, Bridge Bank, Asset Separation

1. Is there any rationale for different terminology in Articles 43(2)(b)(i) and 43(2)(b)(ii) of Directive 2014/59/EU (BRRD)? What happens in a situation, when the bridge bank should be wholly owned by the Member State? Does it mean that bridge bank provisions must allow for partial State ownership, or does it mean that the power according to Article 43(2)(b)(i) should not be implemented? 2. What is the procedure for consecutive bail-in after the transfer tools is used?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1781
  • Topic: Resolution tools and powers
  • Date of submission:
  • Published as final Q&A: 06/02/2015

Clarificaion of "value of an instrument" in Article 48(2)

We seek clarification regarding Article 48(2) of Directive 2014/59/EU (BRRD), the provision regarding write-down and conversion powers is unclear: the value of an instrument may fluctuate therefore the reference to “value” in Article 48(2) seems ambiguous. We wonder if value refers to the “face value” (“notional amount”) or to the “market value”?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1780
  • Topic: Resolution tools and powers
  • Date of submission:
  • Published as final Q&A: 06/02/2015

Liabilities guaranteed by third parties subject to bail-in

The provisions regarding exclusion of "secured liabilities“ from bail-in contained in in Articles 2(2)(67) and 44(2)(b) of Directive 2014/59/EU (BRRD) seem to be ambiguous. We seek clarification as to whether liabilities guaranteed by third parties can be subject to bail-in?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1779
  • Topic: Resolution tools and powers
  • Date of submission:
  • Published as final Q&A: 06/02/2015

Asset transfer in case of sale of business tool

What is the proper basis of transferring assets in case of sale of business tools as referred to in Article 38(1) of Directive 2014/59/EU (BRRD), is it the resolution authority decision or agreement?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1778
  • Topic: Resolution tools and powers
  • Date of submission:
  • Published as final Q&A: 06/02/2015