Write down of capital in BRRD and CRR / CRDIV

Answer

Articles 52(1), point (n), and 54(1), point (a), of Regulation (EU) No 575/2013 (CRR) set out as an eligibility condition for obliges the institution to write down or convert Additional Tier 1 instruments (AT1), that, when the institution's its Common Equity Tier 1 (CET1) ratio falls below a trigger of 5,125% or a higher amount level specified in the contract, the provisions governing the instrument are to require it to be written down or converted to CET1 instruments, with the aim of to increase increasing the institution's its going-concern loss absorbency. The provisions in Article 59 of Directive 2014/59/EU (BRRD) can apply at the point of non-viability (including when the institution has been declared failing or likely to fail and no other private sector alternative or supervisory action other than the write down and conversion of capital instruments could be found, as defined set out in Article 59(3) 32 of Directive 2014/59/EU (BRRD) to apply losses to the holders of additional Tier 1 AT1 and Tier 2 instruments. This The point of non-viability does not hinge on an automatic trigger but is to be determined by the authority designated pursuant to Article 61 of the BRRD. Disclaimer: The answers clarify provisions already contained in the applicable legislation. They do not extend in any way the rights and obligations deriving from such legislation nor do they introduce any additional requirements for the concerned operators and competent authorities. The answers are merely intended to assist natural or legal persons, including competent authorities and Union institutions and bodies in clarifying the application or implementation of the relevant legal provisions. Only the Court of Justice of the European Union is competent to authoritatively interpret Union law. The views expressed in the internal Commission Decision cannot prejudge the position that the European Commission might take before the Union and national courts.