Article 3U.K.Definitions

For the purposes of this Regulation, the definitions provided for in Article 3 of Directive 2014/59/EU shall apply. For the purposes of this Regulation, the following definitions shall also apply:

(1)

‘Direct contagion’ means a situation where the direct losses of counterparties of the institution under resolution, resulting from the write-down of the liabilities of the institution, lead to the default or likely default for those counterparties in the [F1immediate future].

(2)

‘Indirect contagion’ means a situation where the write-down or conversion of institution's liabilities causes a negative reaction by market participants that leads to a severe disruption of the financial system with potential to harm the real economy.

(3)

[F2‘Institution’ has the meaning given in section 3A(8) of the Act.

(4)

‘The resolution authority’ means the Bank of England.

(5)

‘The Act’ means the Banking Act 2009.

(6)

‘Bail-in’ means special bail-in provision within the meaning of section 48B of the Act and ‘bail-in tool’ means the power to make such provision.

(7)

‘Conditions for early intervention’ means the conditions specified in section 71D of the Financial Services and Markets Act 2000.]

Textual Amendments