EBA · 2017_3115 Final Q&A

Principal amount in Articles 43-60

Regulation
Directive 2014/59/EU (BRRD)
Article
43, para. 2
Topic
Resolution tools and powers
Submitted by
Competent authority
Submitted
2017-01-20
Answered
2022-01-21
Answer provided by
ESAs (EBA, ESMA, EIOPA)

Question

What does the term “principal amount” as referred to in Articles 43 to 63 of Directive 2014/59/EU (BRRD) refer to?

Background

In many articles, especially amongst Articles 43-60 BRRD we notice a reference to “principal amount” such as the case is in article 43 para.2b “principal amount of claims” or “principal amount of or outstanding amount of eligible liabilities” in art. 63 para 1e. Could you clarify what is the meaning of “principal’ and the difference with “outstanding amount” as it appears in the accounts of the institutions?

Answer

'Principal amount' refers to the original amount (or part of the amount originally) borrowed/owed, whereas 'outstanding amounts’ may include other elements, such as accrued interest on the principal amount up to the date when resolution is triggered. Disclaimer: The answers clarify provisions already contained in the applicable legislation. They do not extend in any way the rights and obligations deriving from such legislation nor do they introduce any additional requirements for the concerned operators and competent authorities. The answers are merely intended to assist natural or legal persons, including competent authorities and Union institutions and bodies in clarifying the application or implementation of the relevant legal provisions. Only the Court of Justice of the European Union is competent to authoritatively interpret Union law. The views expressed in the internal Commission Decision cannot prejudge the position that the European Commission might take before the Union and national courts.

Original source: European Banking Authority, Q&A ID 2017_3115

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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