Recital 10

(10) The indirect subscription of internal MREL eligible resources should ensure that, when a subsidiary reaches the point of non-viability, losses are effectively passed on to, and the subsidiary concerned is recapitalised by, the resolution entity. Those losses should thus not be absorbed by the intermediate entity, which should become a mere vehicle through which those losses are passed on to the resolution entity. Consequently, and to ensure that the outcome of the indirect subscription is equivalent to that of a full direct subscription, as envisaged under the mandate set out in Article 45f(6) of Directive 2014/59/EU, for the purposes of calculating the total risk exposure amount of the intermediate entity, risk weights should not be applied to the exposures deducted under the new deduction regime to be introduced in Article 72e of Regulation (EU) No 575/2013. In the same vein, those exposures should be excluded from the calculation of the total exposure measure of the intermediate entity. The treatment consisting of not applying risk weights and excluding those exposures from the total exposure measure should be strictly limited to exposures that are deducted in accordance with the new deduction regime to be introduced in Article 72e of that Regulation for the sake of operationalising the approach of indirect subscription of internal MREL eligible resources.

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Source: EUR-Lex (Cellar) · retrieved 2026-10-16 · Text as adopted (Official Journal); later amendments are not incorporated in this text.