Recital (20)

Directive 2014/49/EU provides that where a DGS makes payments in the context of resolution proceedings, the DGS should have a claim against the credit institution concerned for an amount equal to its payments and that claim should rank pari passu with covered deposits. That provision does not distinguish between a DGS’s contribution when an open-bank bail-in tool is used, and a DGS’s contribution to the financing of a transfer strategy followed by the liquidation of the residual entity. To ensure clarity and legal certainty with respect to the existence and amount of a DGS’s claim in different scenarios, it is necessary to specify that when the DGS contributes to the financing of a transfer strategy in resolution, such as the application of the sale of business tool or of the bridge institution tool, or to the financing of alternative measures, whereby a set of assets, rights and liabilities, including deposits, of the credit institution are transferred to a recipient, that DGS should have a claim against the residual entity in subsequent winding-up proceedings under national law. In order to ensure that the shareholders and creditors of the credit institution remaining in the residual entity effectively absorb the losses of that credit institution, and to improve the possibility of repayments in insolvency to the DGS, the DGS claim should have the same ranking as covered deposits. In the event that the open bank bail-in tool is applied, i.e. the credit institution continues its operations, the DGS is to contribute the amount by which covered deposits would have been written down or converted to absorb the losses in that credit institution, had covered deposits been included within the scope of bail-in. Therefore, the DGS’s contribution to resolution should not result in a claim against the institution under resolution as it would negate the purpose of the DGS’s contribution.