EBA · 2017_3421 Rejected question

Potential inconsistency between articles 68 and articles 69 through 71 in what concerns exemptions.

Regulation
Directive 2014/59/EU (BRRD)
Article
68, para. 1
Topic
Resolution tools and powers
Submitted by
Competent authority
Submitted
2017-07-25
More Q&As on this regulation →

Question

Considering contracts involving central counterparties and central banks are exempted from Member States' powers (i) "to suspend certain obligations" (69), (ii) "to restrict the enforcement of security interests" (70) and (iii) "to temporarily suspend termination rights" (71), are such organizations exempted from the "exclusion of certain contractual terms in early intervention and resolution" (68)? Example: if a crisis prevention measure is taken in relation to an entity with which a central counterparty or a central bank has a bilateral agreement, would the central counterparty or central bank be able to immediately exercise its contractual termination rights on the grounds of the referred intervention?

Background

Article 68 of BRRD does not exclude contracts involving central counterparties or central banks. On the other hand, articles 69-71, which govern Member States powers, do contain explicit exceptions for central counterparties and central banks.
No answer published yet.

Original source: European Banking Authority, Q&A ID 2017_3421

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.

Similar Q&As

Prohibition for institutions to enter into agreements with third country counterparties

Answered 2022-01-21

Amendments to Article 19

Answered 2016-02-05

Reference to Article 49 in Article 63(1)(k)

Answered 2017-11-10

Exclusion of “financial services” from the exemption from bail-in

Answered 2016-11-18

Temporary discontinuance of access to deposits in resolution

Answered 2016-08-26

More Q&As on this topic

Conversion of eligible liabilities to equity

Answered 2022-01-21

Principal amount in Articles 43-60

Answered 2022-01-21

Rights over or in relation to assets, rights and liabilities transferred

Answered 2022-01-21

Purpose of the use of the power to write down and convert capital instruments and eligible liabilities

Answered 2022-01-21

AST in combination with other resolution tools

Answered 2022-01-21

📋 Track EU financial regulation continuously

Forseti monitors EU financial regulation and delivers personalised alerts anchored to verified official sources.

Start free trial → Learn more

14-day free trial. No credit card required.