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Directive 2006/48/EC of the European Parliament and of the Council (repealed)Show full title

Directive 2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuit of the business of credit institutions (recast) (Text with EEA relevance) (repealed)

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Article 136U.K.

1.Competent authorities shall require any credit institution that does not meet the requirements of this Directive to take the necessary actions or steps at an early stage to address the situation.

For those purposes, the measures available to the competent authorities shall include the following:

(a)obliging credit institutions to hold own funds in excess of the minimum level laid down in Article 75;

(b)requiring the reinforcement of the arrangements, processes, mechanisms and strategies implemented to comply with Articles 22 and 123;

(c)requiring credit institutions to apply a specific provisioning policy or treatment of assets in terms of own funds requirements;

(d)restricting or limiting the business, operations or network of credit institutions;[F1 and]

(e)requiring the reduction of the risk inherent in the activities, products and systems of credit institutions[F2;]

[F3(f) requiring credit institutions to limit variable remuneration as a percentage of total net revenues when it is inconsistent with the maintenance of a sound capital base;

(g) requiring credit institutions to use net profits to strengthen the capital base.]

The adoption of these measures shall be subject to Chapter 1, Section 2.

2.A specific own funds requirement in excess of the minimum level laid down in Article 75 shall be imposed by the competent authorities at least on the credit institutions which do not meet the requirements laid down in Articles 22, 109 and 123, or in respect of which a negative determination has been made on the issue described in Article 124, paragraph 3, if the sole application of other measures is unlikely to improve the arrangements, processes, mechanisms and strategies sufficiently within an appropriate timeframe.

[F3For the purposes of determining the appropriate level of own funds on the basis of the review and evaluation carried out in accordance with Article 124, the competent authorities shall assess whether any imposition of a specific own funds requirement in excess of the minimum level is required to capture risks to which a credit institution is or might be exposed, taking into account the following:

(a) the quantitative and qualitative aspects of the credit institutions’ assessment process referred to in Article 123;

(b) the credit institutions’ arrangements, processes and mechanisms referred to in Article 22;

(c) the outcome of the review and evaluation carried out in accordance with Article 124.]

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