Recital (11)

For certain resolution entities, the preferred resolution strategy set out in the resolution plan or the group resolution plan primarily relies on the transfer of the business of the institution under resolution to a private purchaser or to a bridge institution. In such cases, it is possible that the DGS could be asked to make a contribution towards resolution action, potentially to ensure the protection of certain deposits that are not covered by the DGS. To minimise moral hazard, it should therefore be specified that, where the resolution plan envisages the application of the sale of business tool or of the bridge institution tool and the resolution entity’s exit from the market, the MREL for the resolution entity concerned should not be set at a level below certain thresholds. Where the application of the rules for the calibration of the MREL results in an amount higher than those thresholds, that higher amount should prevail. Those thresholds should not apply to the MREL set for resolution entities the preferred resolution strategy of which consists of the application of the bail-in tool for the purposes of its recapitalisation to an extent sufficient to restore its ability to continue to carry out the activities for which it is authorised, even where the preferred resolution strategy envisages the application of the bail-in tool in combination with other resolution tools, the latter being used in an ancillary manner.