(24)The risk of widespread contagion may be direct, where the direct losses to be suffered by counterparties of the institution under resolution lead to default or severe solvency issues for those counterparties and, in turn, for their counterparties. The possibility of a failure of one or more financial institution failing or becoming distressed as a direct consequence of the bail-in should not lead automatically to the exclusion of liabilities from bail-in. Decisions on exclusions should be made in proportion to the systemic risks to which direct contagion may give rise.