4.3.2 Early intervention

The second stage that the BRRD provides for is the stage of early intervention. In this stage, the financial and economic situation of the bank is deteriorating, but an economic recovery is still possible. When – because of a deteriorating situation – a bank infringes or is likely to infringe requirements from CRD IV/ CRR, the competent authority can take the early intervention measures that are listed in Art. 27 BRRD. For instance, the competent authority can require the management body of the bank to implement one or more of the arrangements or measures set out in the recovery plan.1 The competent authority can also require one or more members of the management body or senior management of the bank to be removed or replaced if those persons are found unfit to perform their duties.2

It is worth stressing that these measures can be taken by the competent authority rather than by the resolution authority. In the early intervention-stage, the competent authority plays a central role; in the resolution-stage, the central role is played by the resolution authority – as will be discussed in the following subsection.