Difference between a reduction to zero and a cancelation

The reduction to zero referred to in Article 63(1)(e), (g) and (h) of Directive 2014/59/EU (BRRD) would permit that the instrument continues to exist with a 0 value. To cancel the instrument as referred to in Article 63(1)(e), (g) and (h) of Directive 2014/59/EU (BRRD) would render the instrument legally inexistent. The intention behind Article 63(1)(e), (g) and (h) was to cover both possibilities, both for eligible bail-inable liabilities, including debt instruments, and “relevant capital instruments” as well as shares and other instruments of ownership. The list in any event is non exhaustive, and the resolution authority should have at its disposal all powers needed in order to exercise the resolution tools foreseen in the Directive. Also, it is possible to reduce the principal amount in respect of debt instruments, which are not eligible for own funds, if they are eligible bail-inable liabilities. For debt instruments which are “relevant capital instruments“ according to Directive 2014/59/EU (BRRD), the write down power is foreseen in Article 59. Disclaimer: This question goes beyond matters of consistent and effective application of the regulatory framework. A Directorate General of the Commission (Directorate General Financial Stability, Financial Services and Capital Markets Union) has prepared the answer, albeit that only the Court of Justice of the European Union can provide definitive interpretations of EU legislation. This is an unofficial opinion of that Directorate General, which the European Banking Authority publishes on its behalf. The answers are not binding on the European Commission as an institution. You should be aware that the European Commission could adopt a position different from the one expressed in such Q&As, for instance in infringement proceedings or after a detailed examination of a specific case or on the basis of any new legal or factual elements that may have been brought to its attention.