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Recital 12

Recital 12

(12)Article 77(2) of Regulation (EU) No 575/2013 requires institutions to obtain the prior permission of the resolution authority to effect the call, redemption, repayment or repurchase of eligible liabilities instruments. According to Article 78a(1) of that Regulation, the permission may only be granted where a number of conditions have been complied with, including the condition that the institution replaces the eligible liabilities instruments with own funds or eligible liabilities instruments of equal or higher quality at terms that are sustainable for the income capacity of the institution. Article 78a(3), second subparagraph, of Regulation (EU) No 575/2013 requires that the standards on the meaning of ‘sustainable for the income capacity of the institution’ in the context of eligible liabilities instruments are fully aligned with its equivalent for own funds. It is therefore necessary to specify that the same meaning of ‘sustainable for the income capacity of the institution’ is to be used for both types of instruments.

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