Members' Research Service By / December 20, 2022

Amendments to the Capital Requirements Regulation in the area of resolution (‘daisy chain’ proposal) [EU Legislation in Progress]

The regulatory framework on bank resolution relies on the prudential capital regulation framework set out in the Capital Requirements Directive (CRD, Directive 2013/36/EU) and the Capital Requirements Regulation (CRR, Regulation 575/2013), as well as on the Bank Recovery and Resolution Directive (BRRD, Directive 2014/59/EU) which sets out arrangements to deal with banks in financial distress.

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Written by Issam Hallak (1st edition).

On 27 October 2021, the Commission tabled a regulation amending the Capital Requirements Regulation (CRR) and the Banking Resolution and Recovery Directive (BRRD) with a view to resolving inconsistencies regarding the internal minimum requirements for own funds and eligible liabilities (iMREL). The iMREL are indirectly channelled through a number of intermediate parents up to the resolution entity of the group, in a process also known as a ‘daisy chain’.

In its negotiating position adopted in February 2022, Parliament supported the proposal suggesting some changes. The provisional agreement resulting from interinstitutional negotiations adds provisions for a framed review that takes into account the different types of banking group structure. Parliament adopted the agreement on 13 September 2022, and the final act was published in the Official Journal on 25 October 2022.


Regulation amending Regulation (EU) No 575/2013 and Directive 2014/59/EU as regards the prudential treatment of global systemically important institution groups with a multiple point of entry resolution strategy and a methodology for the indirect subscription of instruments eligible for meeting the minimum requirement for own funds and eligible liabilities
Committee responsible:Economic and Monetary Policy (ECON)COM(2021)0665
Rapporteur:Jonás Fernández (S&D, Spain)2021/0343(COD)
Shadow rapporteurs:Othmar Karas (EPP, Austria)
Linea Søgaard Lidell (Renew, Denmark) Ernest Urtasun (Greens/EFA, Spain)
Marco Zanni (ID, Italy)
Raffaele Fitto (ECR, Italy)
Martin Schirdewan (The Left, Germany)
Ordinary legislative procedure (COD)
(Parliament and Council on equal footing
– formerly ‘co-decision’)
Procedure completed. Regulation (EU) 2022/2036
OJ L 275/1, 25.10.2022, pp. 1–10

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