Question
Does Article 55 BRRD apply also to agreements (such as guarantees or counter-guarantees) that create contingent liabilities, which, as such, are not subject to bail-in unless and until the contingency occurs?
Background on the question
Article 55 BRRD applies in relation to certain 1cagreements creating [a] liability 1d governed by third-country law. While the BRRD does not provide a definition of 1cliability 1d, Article 55 excludes from its scope of application agreements creating liabilities that are not subject to bail-in. There is therefore scope to exclude certain forms of liability from the requirement to include the contractual term, including contingent liabilities, given that these are not subject to bail-in unless and until the contingency occurs.
Answer
Please note that as part of adjustments to the Single Rulebook Q&A process, agreed by the EBA and the European Commission, it has been decided to reject outstanding questions submitted before 1 January 2020, when the Q&A process was updated as part of the last ESAs Review. In particular, the question that you have submitted has now regrettably been rejected and will not be addressed.If you believe your question would still benefit from clarification, you are invited to resubmit your question, adapting it to reflect any legislative, regulatory or other relevant developments that may have occurred since the initial date of submission. The EBA will aim to address resubmitted questions as a matter of priority. When considering to resubmit, you are kindly requested to observe the updated admissibility criteria agreed in the context of the adjustment of the Q&A process, available in theAdditional background and guidance for asking questions. We hope for your understanding.For further information please refer to thepress releaseand the updatedQ&A page.