4.8.3 Cancellation and modification of contractual terms

The resolution authorities have the power to cancel or modify the terms of a contract to which the bank in resolution is a part or substitute a recipient as a party.1 The resolution authorities also have the power to amend or alter the maturity of debt instruments and other eligible liabilities or alter the amount of interest payable or the date on which the interest becomes payable, including by suspending payment for a temporary period, the power to close out and terminate financial contracts or derivatives contracts.2

An example of the exercise of this power can be found in the resolution of HETA. The maturity of all debt instruments issued by HETA, other liabilities and outstanding amounts, which already existed before 1 March 2015, was altered to the date on which the decision to liquidate HETA will be taken or 31 December 2023, whichever is earlier. In addition, the interest rate for eligible liabilities and relevant capital instruments issued by HETA was set at 0% with effect from 1 March 2015.3