2. Subject matter, scope and definitions

According to Article 27(1) of Directive 2014/59/EU, in situations where an institution is infringing or is likely in the near future to infringe the requirements of Regulation (EU) No 575/2013, Directive 2013/36/EU, Title II of Directive 2014/65/EU or any of Articles 3 to 7, 14 to 17, and 24, 25 and 26 of Regulation (EU) No 600/2014, including national legal acts implementing Directive 2013/36/EU or the technical standards developed by the EBA pursuant to the relevant provision of Regulation (EU) No 575/2013 or Directive 2013/36/EU and endorsed by the European Commission, the competent authorities shall have at their disposal at least the set of early intervention measures listed in Article 27(1) of Directive 2014/59/EU, without prejudice to the supervisory powers referred to in Article 104 of Directive 2013/36/EU. Pursuant to Article 27(4) of Directive 2014/59/EU these Guidelines promote the consistent application of the triggers for the decision on the application of such early intervention measures.

In order to increase consistency in supervisory practices in relation to the application of such triggers, the Guidelines also clarify requirements that competent authorities should follow when setting thresholds related to financial and risk indicators to be routinely monitored under the supervisory review and evaluation process (‘SREP’) as specified in the SREP Guidelines, and the procedures to follow in the event of breaches of these thresholds.

The Guidelines do not address the interaction between the competent authorities and the resolution authorities in relation to breaches of the triggers, which is already disciplined in Article 27(2) of Directive 2014/59/EU.

The assessment of whether an institution ‘infringes or is likely to infringe in the near future’ the requirements of Regulation (EU) No 575/2013 or of Directive 2013/36/EU is carried out by the competent authorities based on their comprehensive assessment, including by means of SREP as described in Article 97 of Directive 2013/36/EU and further specified in the SREP Guidelines.

Definitions

The following definitions apply for the purposes of these Guidelines:

• a. ‘Conditions for early intervention’ means a situation when an institution infringes or is likely in the near future to infringe the requirements of Regulation (EU) No 575/2013, Directive 2013/36/EU, Title II of Directive 2014/65/EU or any of Articles 3 to 7, 14 to 17, and 24, 25 and 26 of Regulation (EU) No 600/2014 or of relevant EU or national implementing legislation.
• b. ‘Early intervention measures’ means the early intervention measures set out in Article 27(1) of Directive 2014/59/EU.
• c. ‘SREP’ means the supervisory review and evaluation process as defined in Article 97 of Directive 2013/36/EU and further specified in the SREP Guidelines.
• d. ‘SREP Guidelines’ means the EBA Guidelines on common procedures and methodologies for SREP developed in accordance with Article 107(3) of Directive 2013/36/EU³ .
• e. ‘Overall SREP assessment’, as defined in the SREP Guidelines, is the up-to-date assessment of the overall viability of an institution based on an assessment of SREP elements.
• f. ‘Overall SREP score’, as defined in the SREP Guidelines, is the numerical indicator of the overall risk to the viability of an institution based on the Overall SREP assessment.
• g. ‘SREP element’, as defined in the SREP Guidelines, is one of the following components of the SREP framework: business model analysis, assessment of internal governance and institution-wide controls, assessment of risks to capital, SREP capital assessment, assessment of risks to liquidity and funding, and SREP liquidity assessment.

Addressees

³ EBA/GL/2014/13 of 19 December 2014

These Guidelines are addressed to the competent authorities as defined in Article 4(2)(i) of Regulation (EU) No 1093/2010.