EBA · 2016_3042 Rejected question

Recapitalization

Regulation
Directive 2014/59/EU (BRRD)
Article
19-26
Topic
Intra-group financial support
Submitted by
Competent authority
Submitted
2016-12-09
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Question

Are capital increases of a subsidiary meeting the conditions for early intervention by the mother company covered by the BRRD provisions on intragroup financial support?

Background

In line with the retained SPE resolution strategy for the group, a key recovery option for subsidiaries could be a capital increase of the subsidiary by the parent undertaking, subject to a case by case business analysis. Such recovery option is to be considered as soon as the capital level of the subsidiary falls below a certain level (in the early intervention zone). Should the granting of such intragroup financial support be performed in line with the BRRD provisions on intragroup financial support? Should e.g. this commitment be laid down in an ex ante contract authorized by the CA, and do the other relevant provisions apply?
No answer published yet.

Original source: European Banking Authority, Q&A ID 2016_3042

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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