Extraordinary public financial support

1. Extraordinary public financial support outside of resolution action may be granted to an entity as referred to in Article 2, on an exceptional basis, provided that the extraordinary public financial support complies with the conditions and requirements established in the Union State aid framework, only in the following cases:

where, to remedy a serious disturbance in the economy of a Member State of an exceptional or systemic nature and to preserve financial stability, the extraordinary public financial support takes any of the following forms:

a State guarantee to back liquidity facilities provided by central banks in accordance with the central banks’ conditions;

a State guarantee of newly issued liabilities;

an acquisition of own funds instruments other than Common Equity Tier 1 instruments or of other capital instruments, or a use of impaired asset measures, at prices, duration and other terms that do not confer an undue advantage upon the entity concerned, where none of the circumstances referred to in Article 18(4), point (a), (b) or (c), or Article 21(1) are present at the time the public support is granted;

where the extraordinary public financial support takes the form of an intervention by a deposit guarantee scheme, as referred to in Article 11(3) of Directive 2014/49/EU;

where the extraordinary public financial support takes the form of an intervention by a deposit guarantee scheme, as referred to in Article 11(5) of Directive 2014/49/EU;

where the extraordinary public financial support takes the form of State aid granted to an entity referred to in Article 32b of Directive 2014/59/EU, other than the support granted by a deposit guarantee scheme pursuant to Article 11(5) of Directive 2014/49/EU.

2. The support measures referred to in paragraph 1, point (a), shall:

be confined to solvent entities, as confirmed by the ECB or by the relevant national competent authority;

be of a precautionary and temporary nature and be based on a predefined strategy, approved by the ECB or the relevant national competent authority, to exit the support measures, which includes a clearly specified termination date, sale date or repayment schedule for each of those measures;

be proportionate to remedy the consequences of the serious disturbance in the economy of a Member State of an exceptional or systemic nature and to preserve financial stability; and

not be used to offset losses that the entity has incurred or is likely to incur over at least the following 12 months.

The predefined strategy referred to in the first subparagraph, point (b), of this paragraph shall not be disclosed until after the entity exits the support measures concerned, or until after the assessment referred to in paragraph 6, second subparagraph, of this Article has been completed, subject to non-delayable disclosure obligations as referred to in Article 17 of Regulation (EU) No 596/2014.

3. For the purposes of paragraph 2, first subparagraph, point (a), of this Article, where the extraordinary public financial support takes the form of the support measures referred to in paragraph 1, points (a)(ii) and (iii), of this Article, an entity shall be deemed to be solvent where the ECB or the relevant national competent authority has concluded that no breach has occurred, or is likely to occur in the following 12 months, based on current expectations, of any of the requirements referred to in Article 92(1) of Regulation (EU) No 575/2013, Article 104a of Directive 2013/36/EU, Article 11(1) of Regulation (EU) 2019/2033, Article 40 of Directive (EU) 2019/2034 or the relevant applicable requirements under Union or national law.

When assessing whether a breach of the requirements referred to in the first subparagraph of this paragraph has occurred, the ECB or the relevant national competent authority shall disregard any breaches that have effectively been remedied by the time of the assessment. Where the ECB or the relevant national competent authority concludes that a future breach of the requirements referred to in Article 104a of Directive 2013/36/EU or Article 40 of Directive (EU) 2019/2034 is likely to occur in the following 12 months, it may exceptionally deem an entity to be solvent where it determines that the breach will be of a short-term nature and that effective remediation measures to address it have been planned by the entity and have been assessed as credible by the ECB or the relevant national competent authority by the time of the assessment.

4. For the purposes of paragraph 2, first subparagraph, point (d), the ECB or the relevant national competent authority shall quantify the losses that the entity has incurred or is likely to incur. That quantification shall be based on asset quality reviews conducted by the ECB, EBA or national authorities or, where appropriate, on on-site inspections conducted by the ECB or the relevant national competent authority. Where it is not possible to conduct those reviews or inspections within a reasonable time, the ECB or the relevant national competent authority may base the quantification on the entity’s balance sheet, provided that the balance sheet complies with the applicable accounting rules and standards, as confirmed by an independent external auditor. The quantification shall be made as close as possible to the date of the granting of the support measures and by using the most recent information available to the ECB or the relevant national competent authority.

5. The support measures referred to in paragraph 1, point (a)(iii), shall be limited to measures that have been assessed by the ECB or the national competent authority as necessary to preserve the solvency of the entity by addressing the capital shortfall established in the adverse scenario of national, Union or SSM-wide stress tests or equivalent exercises conducted by the ECB, EBA or national authorities, where applicable, and confirmed by the ECB or the relevant competent authority.

By way of derogation from paragraph 1, point (a)(iii), of this Article, the acquisition of Common Equity Tier 1 instruments shall be exceptionally permitted where the nature of the shortfall identified is such that the acquisition of any other own funds instruments or other capital instruments would not make it possible for the entity concerned to address the capital shortfall established in the adverse scenario in the relevant stress test or equivalent exercise. The amount of acquired Common Equity Tier 1 instruments shall not exceed 2 % of the total risk exposure amount of the entity concerned calculated in accordance with Article 92(3) of Regulation (EU) No 575/2013.

In exceptional circumstances, the ECB or the relevant national competent authority may permit the 2 % limit to be exceeded where it has demonstrated that it is necessary and appropriate for the implementation of the support measures, taking into account the specific circumstances of the case. The exceeding of the limit shall be of an amount that does not create any risks for the timely and credible execution of the predefined strategy to exit the support measures. The ECB or the relevant national competent authority shall provide the Commission with the analysis underlying its permission to exceed the 2 % limit for the purposes of any potential State aid assessment.

6. If any of the support measures referred to in paragraph 1, point (a), is not redeemed, repaid or otherwise terminated in accordance with the terms of the strategy to exit the support measure established at the time of granting such measure, the ECB or the relevant national competent authority shall request the entity to submit a one-time remediation plan. The remediation plan shall describe the steps to be taken in order to exit the support measure within two years and to ensure the long-term viability of the entity. The remediation plan shall not constrain the power of the relevant authorities to assess or determine whether the entity is failing or is likely to fail, at any time.

Where the ECB or the relevant national competent authority is not satisfied that the remediation plan is credible or feasible, or where the entity fails to comply with the remediation plan, the relevant authorities shall assess whether the entity is failing or is likely to fail.

7. The ECB or the relevant national competent authority shall inform the Board of the results of its assessment of whether the conditions referred to in paragraph 2, first subparagraph, points (a), (b) and (d), of this Article are met with respect to the entities and groups referred to in Article 7(2) and to the entities and groups referred to in Article 7(4), point (b), and Article 7(5) where the conditions for the application of those provisions are met.’

Article 19 is amended as follows:

paragraph 1 is replaced by the following:

‘1. Where resolution action involves the granting of State aid pursuant to Article 107(1) TFEU or of Fund aid in accordance with paragraph 3 of this Article, the resolution scheme referred to in Article 18(6) of this Regulation shall not enter into force until such time as the Commission adopts a positive or conditional decision, or a decision not to raise objections, concerning the compatibility of the use of such aid with the internal market. The Commission shall, taking into consideration the need for the timely execution of the resolution scheme by the Board, adopt the decision concerning the compatibility of the use of State aid or of Fund aid with the internal market by, at the latest, the time it endorses the resolution scheme or objects to it pursuant to Article 18(7), second subparagraph, of this Regulation, or before the expiry of the period of 24 hours referred to in Article 18(7), fifth subparagraph, of this Regulation, whichever is earlier.

In performing the tasks conferred on them by Article 18, Union institutions shall have in place structural arrangements that ensure operational independence and avoid conflicts of interest that could arise between the functions entrusted with the performance of those tasks and other functions and shall make public, in an appropriate manner, all relevant information on their internal organisation in that regard.’

paragraph 3 is replaced by the following:

‘3. As soon as the Board considers that it may be necessary to use the Fund, it shall informally, promptly and in a confidential manner contact the Commission to discuss the possible use of the Fund, including the legal and economic aspects of its use. Once the Board is sufficiently certain that the resolution scheme envisaged will entail the use of Fund aid, the Board shall formally notify the Commission of the proposed use of the Fund. That notification shall contain all of the information that the Commission needs to make its assessments pursuant to this paragraph and that the Board has in its possession or has the power to obtain in accordance with this Regulation.

Upon receiving the notification referred to in the first subparagraph, the Commission shall assess whether the use of the Fund would distort, or threaten to distort, competition by favouring the beneficiary or any other undertaking so as, insofar as it would affect trade between Member States, to be incompatible with the internal market. The Commission shall apply to the use of the Fund the criteria established for the application of State aid rules as enshrined in Article 107 TFEU. The Board shall provide the Commission with the information in its possession, or which the Board has the power to obtain in accordance with this Regulation, and that the Commission deems necessary to carry out that assessment.

When making its assessment, the Commission shall be guided by all the relevant regulations adopted under Article 109 TFEU, all related and relevant communications and guidance of the Commission, and all measures adopted by the Commission in application of the rules of the Treaties relating to State aid as are in force at the time the assessment is to be made. Those measures shall be applied as if references to the Member State responsible for notifying the aid were references to the Board, and with any other necessary modifications.

The Commission shall adopt a decision on the compatibility of the use of the Fund with the internal market and address that decision to the Board and to the national resolution authorities of the Member State or Member States concerned. That decision may be contingent on conditions, commitments or undertakings in respect of the beneficiary and it shall take into account the need for timely execution of resolution action by the Board.

The decision may also lay down obligations on the Board, the national resolution authorities in the participating Member State or Member States concerned or the beneficiary to enable compliance with it to be monitored. This may include requirements for the appointment of a trustee or other independent person to assist in monitoring. A trustee or other independent person may perform such functions as may be specified in the Commission decision.

Any decision pursuant to this paragraph shall be published in the Official Journal of the European Union .

The Commission may issue a negative decision, addressed to the Board, where it decides that the proposed use of the Fund would be incompatible with the internal market and cannot be implemented in the form proposed by the Board. On receipt of such a decision the Board shall reconsider its resolution scheme and prepare a revised resolution scheme.’

paragraph 10 is replaced by the following:

‘10. By way of derogation from paragraph 3, the Council may, on an application of a Member State or the Board, within seven days of such application being made, unanimously decide that the use of the Fund is to be considered compatible with the internal market, where such a decision is justified by exceptional circumstances. The Commission shall take a decision on the case where the Council has not decided within that seven-day period.’

Article 20 is amended as follows:

the following paragraph is inserted:

‘8a. Where necessary to inform the decisions referred to in paragraph 5, points (c) and (d), the valuer shall complement the information referred to in paragraph 7, point (c), with an estimate of the value of the off-balance-sheet assets and the value of the liabilities that could arise in the future from an uncertain event and of the liabilities of uncertain timing or amount.’

in paragraph 17, point (a) is replaced by the following:

the treatment that shareholders and creditors, or the relevant deposit guarantee schemes in the cases referred to in Article 79(1), point (a), and Article 79(6), would have received if an institution under resolution with respect to which the resolution action or actions have been effected, had entered normal insolvency proceedings at the time when the decision on the resolution action was taken;’

Article 21 is amended as follows:

paragraph 1 is amended as follows:

the first subparagraph is amended as follows:

the introductory wording is replaced by the following:

‘The Board, acting under the procedure laid down in Article 18, shall exercise the power to write down or convert relevant capital instruments, and eligible liabilities as referred to in paragraph 7a of this Article, 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), point (b), and Article 7(5) where the conditions for the application of those provisions are met, only when it has determined in its executive session, upon receiving a communication pursuant to the second subparagraph of this paragraph or on its own initiative and taking into consideration the need to implement effectively the write-down or conversion power or, where applicable, the resolution strategy for the resolution group, that one or more of the following circumstances apply:’

point (e) is replaced by the following:

extraordinary public financial support is required by the entity or group, except where that support is granted in one of the forms referred to in Article 18a.’

the second subparagraph is replaced by the following:

‘The assessment of the conditions referred to in the first subparagraph, points (a) to (d), of this paragraph, shall be made by the ECB for entities referred to in Article 7(2), point (a), or by the 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, in accordance with the allocation of tasks pursuant to the procedure laid down in Article 18(1) and (2).’

paragraph 2 is deleted;

in paragraph 3, point (b) is replaced by the following:

having regard to timing and other relevant circumstances, there is no reasonable prospect that any action, including alternative private sector measures, supervisory action or early intervention measures, other than the write-down or conversion of relevant capital instruments, and eligible liabilities as referred to in paragraph 7a, would prevent the failure of that entity or group within a reasonable timeframe.’

paragraph 9 is replaced by the following:

‘9. Where one or more of the conditions referred to in paragraph 1 of this Article are met in relation to an entity referred to in that paragraph, and the conditions referred to in Article 18(1) are also 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.’

in Article 22, paragraph 5 is replaced by the following:

‘5. Where the resolution tools referred to in paragraph 2, point (a) or (b), are used, independently or in combination with other resolution tools, to transfer only part of the assets, rights or liabilities of the institution under resolution, any residual entity remaining after the transfer of the assets, rights or liabilities, and the application of other resolution tools, where relevant, shall be wound up in an orderly manner in accordance with the applicable national law.

The first subparagraph of this paragraph shall not apply where the bail-in tool is applied to an institution under resolution for the purpose of Article 27(1), point (a), in combination with other resolution tools.

In the cases referred to in the first subparagraph of this paragraph, where resolution action would result in losses being borne by creditors or in their claims being converted, the Board may decide not to exercise the power to write down and convert capital instruments in accordance with Article 21, as referred to in paragraph 1 of this Article, if those instruments are to be left in the residual entity and the application of the resolution tools referred to in paragraph 2, point (a) or (b), of this Article together with the winding up of the residual entity would ensure, on the basis of the valuation referred to in Article 20, that they would bear losses ahead of any other creditors of the institution under resolution.’

Article 27 is amended as follows:

paragraph 7 is replaced by the following:

‘7. The Fund may make a contribution as referred to in paragraph 6 only where all of the following conditions are met:

a contribution to loss absorption and recapitalisation equal to an amount not less than 8 % of the total liabilities including own funds of the institution under resolution, measured in accordance with the valuation provided for in Article 20(1) to (15) of this Regulation, has been made by shareholders and the holders of relevant capital instruments and of other bail-inable liabilities through reduction, write-down or conversion pursuant to Article 48(1) of Directive 2014/59/EU and Article 21(10) of this Regulation, and by the deposit guarantee scheme pursuant to Article 79 of this Regulation where relevant;

the contribution from the Fund does not exceed 5 % of the total liabilities including own funds of the institution under resolution, measured in accordance with the valuation provided for in Article 20(1) to (15).’

paragraph 9 is replaced by the following:

‘9. In extraordinary circumstances, the Board may seek further funding from alternative financing sources after:

the Fund has made a contribution pursuant to paragraph 6 and the 5 % limit referred to in paragraph 7, point (b), has been reached; and

all bail-inable liabilities that are not eligible deposits, that rank lower than the deposits referred to in Article 108(1), first subparagraph, point (b), of Directive 2014/59/EU, and that have not been excluded from bail-in pursuant to paragraph 5 of this Article, have been written down or converted in full.’

paragraph 13 is replaced by the following:

‘13. The Board shall assess, on the basis of a valuation that complies with the requirements of Article 20(1) to (15), the aggregate of:

where relevant, the amount by which bail-inable liabilities must be written down in order to ensure that the net asset value of the institution under resolution is equal to zero; and

where relevant, the amount by which bail-inable liabilities must be converted into shares or other types of capital instruments in order to restore the Common Equity Tier 1 capital ratio of either:

the institution under resolution; or

the bridge institution.

13a. The assessment referred to in paragraph 13 shall establish the amount by which bail-inable liabilities need to be written down or converted for the following purposes:

to restore the Common Equity Tier 1 capital ratio of the institution under resolution or, where applicable, establish the ratio of the bridge institution, taking into account any contribution of capital by the Fund made pursuant to Article 76(1), point (d);

to sustain sufficient market confidence in the institution under resolution or the bridge institution, taking into account any liabilities that could arise in the future from an uncertain event or liabilities of uncertain timing or amount which have not been written down or converted, and enable that institution to continue to meet, for at least one year, the conditions for authorisation and to continue to carry out the activities for which it is authorised under Directive 2013/36/EU or 2014/65/EU.

Where the Board intends to use the asset separation tool referred to in Article 26, the amount by which bail-inable liabilities need to be reduced shall take into account a prudent estimate of the capital needs of the asset management vehicle as appropriate.’

Article 30 is amended as follows:

the title is replaced by the following:

‘Obligation to cooperate and information exchange’

paragraph 2 is replaced by the following:

‘2. In the exercise of their respective responsibilities under this Regulation, the Board, the Council, the Commission, the ECB and the national resolution authorities and national competent authorities shall cooperate closely, in particular in the resolution planning, early intervention and resolution phases pursuant to Articles 8 to 29. They shall provide each other with all information necessary for the performance of their respective tasks, including the information referred to in paragraphs 2a, 2b and 2c of this Article.’

the following paragraphs are inserted:

‘2a. The Board, the ESRB, EBA, ESMA and EIOPA shall cooperate closely and provide each other with all of the information necessary for the performance of their respective tasks.

2b. The ECB and other members of the European System of Central Banks (ESCB) shall cooperate closely with the Board and provide it with all of the information necessary for the performance of the Board’s tasks, including the information collected by them pursuant to the Statute of the European System of Central Banks and of the European Central Bank. Article 88(6) shall apply to all such exchanges of information.

2c. The designated authorities and deposit guarantee schemes shall cooperate closely with the Board. Those designated authorities, deposit guarantee schemes and the Board shall provide each other with all of the information necessary for the performance of their respective tasks. The designated authorities and deposit guarantee schemes shall be subject to the requirements of professional secrecy laid down in Article 88.’

paragraphs 6 and 7 are replaced by the following:

‘6. The Board shall endeavour to cooperate closely with any public financial assistance facility, including the European Financial Stability Facility (EFSF) and the European Stability Mechanism (ESM), in particular in all of the following situations:

in the extraordinary circumstances referred to in Article 27(9) and where such a facility has granted, or is likely to grant, direct or indirect financial assistance to entities established in a participating Member State;

where the Board has contracted for the Fund a financial arrangement pursuant to Article 74.

7. Where necessary, the Board shall conclude a memorandum of understanding with the ECB and other members of the ESCB, the national resolution authorities and the national competent authorities, and the designated authorities and deposit guarantee schemes describing in general terms how they will cooperate under paragraphs 2 to 2c and 4 of this Article and under Article 74, second paragraph, in the performance of their respective tasks under Union law. The memorandum shall be reviewed on a regular basis and shall be published subject to the requirements of professional secrecy.’

the following article is inserted:

REGULATION (EU) 2026/808 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 30 March 2026 amending Regulation (EU) No 806/2014 as regards early intervention measures, conditions for resolution and funding of resolution action