EBA · 2016_2669 Rejected question

Contractual recognition of bail-in

Regulation
Directive 2014/59/EU (BRRD)
Article
Article 55 Directive 2014/59/EU, para. 1
Topic
Other topics
Submitted by
Competent authority
Submitted
2016-03-09
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Question

Does Article 55 BRRD apply also to agreements (such as guarantees or counter-guarantees) that create contingent liabilities, which, as such, are not subject to bail-in unless and until the contingency occurs?

Background

Article 55 BRRD applies in relation to certain 1cagreements creating [a] liability 1d governed by third-country law. While the BRRD does not provide a definition of 1cliability 1d, Article 55 excludes from its scope of application agreements creating liabilities that are not subject to bail-in. There is therefore scope to exclude certain forms of liability from the requirement to include the contractual term, including contingent liabilities, given that these are not subject to bail-in unless and until the contingency occurs.
No answer published yet.

Original source: European Banking Authority, Q&A ID 2016_2669

This Q&A is published by European Banking Authority and is non-binding. It does not constitute legal advice. Updated weekly from official ESA sources.

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