AI Summary of Article 72e Deductions from eligible liabilities items
The document outlines the deductions that institutions subject to Article 92a must make from their eligible liabilities. Key deductions include holdings of their own eligible liabilities and those of G-SII entities, especially when there are significant investments or reciprocal cross-holdings designed to inflate loss absorption capacity.
Furthermore, adjustments can be made for parent institutions regarding their subsidiaries' holdings, contingent upon consensus from relevant resolution authorities. Institutions are also required to deduct holdings from subsidiaries that are not resolution entities but must comply with specific regulatory obligations.
Article 72e Deductions from eligible liabilities items
1. Institutions that are subject to Article 92a shall deduct the following from eligible liabilities items:
(a) direct, indirect and synthetic holdings by the institution of own eligible liabilities instruments, including own liabilities that that institution could be obliged to purchase as a result of existing contractual obligations;
(b) direct, indirect and synthetic holdings by the institution of eligible liabilities instruments of G-SII entities with which the institution has reciprocal cross holdings that the competent authority considers to have been designed to artificially inf late the loss absorption and recapitalisation capacity of the resolution entity;
(c) the applicable amount determined in accordance with Article 72i of direct, indirect and synthetic holdings of eligible liabilities instruments of G-SII entities, where the institution does not have a significant investment in those entities;