in force 2026-06-11 MODIFIED+712 −114§
Amended by Regulation (EU) 2026/808 32026R0808
applies from: unchanged
The final subparagraph of paragraph 1 now assigns the assessment of conditions (a) to (d) to the ECB for entities under Article 7(2)(a), to the relevant national competent authority for entities under Article 7(2)(b), Article 7(4)(b) and (5), and to the Board in its executive session, following the allocation of tasks under the procedure in Article 18(1) and (2), whereas the earlier text assigned that assessment to the ECB after consulting the Board, or to the Board itself, without this differentiated allocation.
Paragraph 9 now specifies that the conditions in paragraph 1 and in Article 18(1) may be met in relation to the same entity or to an entity belonging to the same group, and adds a new sentence requiring the Board to adopt a single resolution scheme covering the entity meeting the Article 18(1) conditions together with any entity meeting the paragraph 1 conditions, elements absent from the earlier text.
Cited: Art. 21, v1 · Art. 21, v2
text before / after
02014R0806-20251110 → 02014R0806-20260611
Article 21
Write-down or conversion of capital instruments and eligible liabilities
1. The Board shall exercise the power to write down or convert relevant capital instruments, and eligible liabilities as referred to in paragraph 7a acting under the procedure laid down in Article 18, in relation to the entities and groups referred to in Article 7(2), and to the entities and groups referred to in Article 7(4)(b) and (5), where the conditions for the application of those paragraphs are met, only where it assesses, in its executive session, on receiving a communication pursuant to the second subparagraph or on its own initiative, that one or more of the following conditions are met:
(a) where the determination has been made that the conditions for resolution specified in Articles 16 and 18 have been met, before any resolution action is taken;
(b) the entity will no longer be viable unless the relevant capital instruments, and eligible liabilities as referred to in paragraph 7a are written down or converted into equity;
(c) in the case of relevant capital instruments issued by a subsidiary and where those relevant capital instruments are recognised for the purposes of meeting own funds requirements on an individual basis and on a consolidated basis, unless the write-down or conversion power is exercised in relation to those instruments, the group will no longer be viable;
(d) in the case of relevant capital instruments issued at the level of the parent undertaking and where those relevant capital instruments are recognised for the purposes of meeting own funds requirements on an individual basis at the level of the parent undertaking or on a consolidated basis, unless the write-down or conversion power is exercised in relation to those instruments, the group will no longer be viable;
(e) extraordinary public financial support is required by the entity or group, except in any of the circumstances set out in point (d)(iii) of Article 18(4).
The assessment of the conditions referred to in points (a), (c) and (d) of the first subparagraph subparagraph, points (a) to (d), of this paragraph, shall be made by the ECB, after consulting ECB for entities referred to in Article 7(2), point (a), or by the Board. The Board, relevant national competent authority for entities referred to in Article 7(2), point (b), Article 7(4), point (b), and Article 7(5), and by the Board in its executive session, may also make such assessment. in accordance with the allocation of tasks pursuant to the procedure laid down in Article 18(1) and (2).
2. Regarding the assessment of whether the entity or group is viable, the Board, in its executive session, may make such an assessment only after informing the ECB of its intention and only if the ECB, within three calendar days … 846 unchanged words … applied to relevant capital instruments, and eligible liabilities as referred to in paragraph 7a in order to recapitalise the entity referred to in Article 2 or the group.
9. Where one or more of the conditions referred to in paragraph 1 of this Article are met, met in relation to an entity referred to in that paragraph, and the conditions referred to in Article 18(1) are also met, met in relation to that entity or to an entity belonging to the same group, the procedure laid down in Article 18(6), (7) and (8) shall apply.
The Board shall adopt a single resolution scheme covering the entity for which the conditions referred to in Article 18(1) are met as well as any entity referred to in paragraph 1 of this Article.
10. The Board shall ensure that the national resolution authorities exercise the write-down or conversion powers without delay, in accordance with the priority of claims pursuant to Article 17 and in a way that produces the following results:
(a) Common Equity Tier 1 items are reduced first in proportion to the losses and to the extent of their capacity;
(b) the principal amount of Additional Tier 1 instruments is written down or converted into Common Equity Tier 1 instruments or both, to the extent required to achieve the resolution objectives set out in Article 14 or to the extent of the capacity of the relevant capital instruments, whichever is lower;
(c) the principal amount of Tier 2 instruments is written down or converted into Common Equity Tier 1 instruments or both, to the extent required to achieve the resolution objectives set out in Article 14 or to the extent of the capacity of the relevant capital instruments, whichever is lower;
(d) the principal amount of eligible liabilities as referred to in paragraph 7a is written down or converted into Common Equity Tier 1 instruments or both, to the extent required to achieve the resolution objectives set out in Article 14 or to the extent of the capacity of the relevant eligible liabilities, whichever is lower.
11. The national resolution authorities shall implement the instructions of the Board and exercise the write-down or conversion of relevant capital instruments in accordance with Article 29.