Public funding of failing banks in the European Union (LBF vol. 19) 2020/5.4.3:5.4.3 ELA as a trigger for the exercise of the PONV conversion power?

Public funding of failing banks in the European Union (LBF vol. 19) 2020/5.4.3

5.4.3 ELA as a trigger for the exercise of the PONV conversion power?

Deze functie is alleen te gebruiken als je bent ingelogd.Deze functie is alleen te gebruiken als je bent ingelogd.Deze functie is alleen te gebruiken als je bent ingelogd.

ELA granted by a national central bank does not trigger the exercise of the PONV conversion power as such. If State guarantees are used in support of ELA (i.e. precautionary guarantees), the PONV conversion power must however be exercised, as set out in section 5.3.3.

Taking into account the definition of solvency discussed in section 5.4.1.1, a bank could still be eligible for ELA after it has reached the PONV when there is a credible prospect of recapitalisation during the 6 months following this determination and the bank has sufficient collateral to pledge.1

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