Irrevocable payment commitments are one of the components of the available financial means of resolution financing arrangements. It is therefore necessary to specify the circumstances in which those payment commitments can be called. In the event that an entity ceases to be subject to the obligation to pay contributions to a resolution financing arrangement following a decision to renounce its authorisation, the irrevocable payment commitment should be cancelled. To ensure that the cancellation of the irrevocable payment commitment does not lead to a situation where the available financial means in the resolution financing arrangement fall below a level that the resolution authority deems adequate, the resolution authority should have the power to determine a contribution that the relevant entity should be required to pay. In its decision, the resolution authority should duly consider the need to maintain a level playing field between all participating institutions, including the entity that ceases to be within the scope of Article 1 of Directive 2014/59/EU. The resolution authority is to provide detailed reasons for its decision and disclose that decision, including its reasoning, in its annual report. In addition, to provide more transparency and certainty with respect to the share of irrevocable payment commitments in the total amount of ex ante contributions to be raised, the resolution authority should determine such share on an annual basis, subject to the applicable limits. The competent authority should aim to ensure that any procyclical effect of irrevocable payment commitments depending on their accounting treatment is mitigated.
Text as published in the Official Journal, reproduced verbatim (including any typographical quirks of the source). For the authentic version, see EUR-Lex.
