3. EBA Guidelines on the interpretation of the different circumstances when an institution shall be considered as failing or likely to fail under Article 32(6) of Directive 2014/59/EU

This document contains guidelines issued pursuant to Article 16 of Regulation (EU) No 1093/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Banking Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/78/EC as subsequently amended by Regulation (EU) No 1022/2013 (‘the EBA Regulation’). In accordance with Article 16(3) of the EBA Regulation, the competent authorities, resolution authorities and financial institutions must make every effort to comply with the guidelines.

Guidelines set out the EBA’s view of appropriate supervisory practices within the European System of Financial Supervision or of how Union law should be applied in a particular area. The EBA therefore expects all competent authorities, resolution authorities and financial institutions to whom guidelines are addressed to comply with guidelines. Competent authorities and resolution authorities to whom guidelines apply should comply by incorporating them into their supervisory practices as appropriate (e.g. by amending their legal framework or their supervisory processes), including where guidelines are directed primarily at institutions.

Reporting Requirements

Pursuant to Article 16(3) of the EBA Regulation, the competent authorities and resolution authorities must notify the EBA as to whether they comply or intend to comply with these guidelines, or otherwise with reasons for non-compliance, by dd.mm.yyyy. In the absence of any notification by this deadline, such competent authorities and resolution authorities will be considered by the EBA to be non-compliant. Notifications should be sent by submitting the relevant form to compliance@eba.europa.eu with the reference ‘EBA/GL/2015/07’. Notifications should be submitted by persons with appropriate authority to report compliance on behalf of their competent authorities and resolution authorities.

Notifications will be published on the EBA website, in line with Article 16(3).

Title I - Subject matter, scope and definitions

Subject matter

Definitions

Scope and addressees

Title II – Objective elements for determination that an institution is failing or likely to fail

1. General considerations

2. Capital position

3. Liquidity position

4. Other requirements for continuing authorisation

Title III – Process of determining that an institution is failing or likely to fail

1. Determination made by the competent authority

2. Determination made by the resolution authority

3. Consultation and information exchange between the competent authority and the resolution authority

Title IV - Final Provisions and Implementation