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AI Summary of Article 32c Extraordinary public financial support
Member States may grant extraordinary public financial support outside resolution only in specified cases: (a) to remedy a serious, exceptional or systemic disturbance and preserve financial stability by means of (i) a State guarantee backing central bank liquidity facilities, (ii) a State guarantee of newly issued liabilities, or (iii) acquisition of own funds instruments other than Common Equity Tier 1 (CET1) or use of impaired‑asset measures where Article 32(4)(a)–(c) and Article 59(3) do not apply; (b) or (c) intervention by a deposit guarantee scheme under Article 11(3) or Article 11(5) of Directive 2014/49/EU; (d) State aid under Article 32b other than DGS support pursuant to Article 11(5).
Such support must be confined to solvent institutions as confirmed by the competent authority, be precautionary and temporary with a predefined exit strategy specifying termination, sale or repayment dates, be proportionate and not used to offset losses incurred or likely over the next 12 months. Solvency for measures (a)(ii) and (iii) is assessed by absence of breaches of specified prudential requirements over 12 months or by credible remediation; loss quantification must rely on asset‑quality reviews, stress‑test shortfalls or audited balance sheets; CET1 acquisition is exceptionally permitted up to 2% of the total risk exposure amount (derogations possible with Commission analysis). If support is not exited, a one‑time remediation plan to exit within two years is required; EBA to issue guidelines by 11 May 2027.
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Article 32c Extraordinary public financial support
1. Member States shall ensure that extraordinary public financial support outside of resolution action may be granted to an institution or entity referred to in Article 1(1), point (b), (c) or (d), on an exceptional basis, provided that the extraordinary public financial support complies with the conditions and requirements established in the Union State aid framework, only in the following cases:
(a) where, to remedy a serious disturbance in the economy of a Member State of an exceptional or systemic nature and to preserve financial stability, the extraordinary public financial support takes any of the following forms:
(i) a State guarantee to back liquidity facilities provided by central banks in accordance with the central banks' conditions;
(ii) a State guarantee of newly issued liabilities;
(iii) an acquisition of own funds instruments other than Common Equity Tier 1 instruments or of other capital instruments, or a use of impaired asset measures, at prices, duration and other terms that do not confer an undue advantage upon the institution or entity concerned, where none of the circumstances referred to in Article 32(4), point (a), (b) or (c), or Article 59(3) are present at the time the public support is granted;