GREECE Law and Practice Contributed by: Paris Tzoumas, Vivian Efthymiou and Dimitrios Mekakas, Zepos & Yannopoulos
amount (LAA), which includes the sum of the Pil - lar One requirement and the Pillar Two require - ment as determined by the competent authority, and any requirement in relation to the leverage ratio and a recapitalisation amount (RCA). Greek credit institutions have already taken initiatives to meet the MREL by the end of 2025 (ie, they have issued in recent years Additional Tier 1 capital instruments (AT1) and Tier 2 capital and senior unsecured bonds, which are also an addi - tional source of funding). 8. Insolvency, Recovery and Resolution 8.1 Legal and Regulatory Framework Resolving a Failing Credit Institution – Resolution Measures Greek Law 4335/2015, as amended (Law 4335), incorporated the provisions of Directive 2014/59/ EU (BRRD) into Greek legislation and set out the legal framework for the recovery and resolution of credit institutions. This was amended, in 2021, by Law 4799/2021, transposing the BRRD II into Greek law. The BRRD (as amended by BRRD II) is, in general, in line with the FSB Key Attributes of Effective Resolution regime, which is a soft law. In the case of a credit institution failure, the pro - visions of Law 4335 are applicable. More specifi - cally, the credit institution’s BoD, which consid - ers the credit institution to be failing or likely to fail on the basis of certain objective criteria, must notify, without undue delay, the BoG in accord - ance with Law 4335 and the Bank of Greece Act No 111/2017. At an earlier stage in the deterioration of a credit institution’s financial conditions, the resolution authorities may adopt one of the early inter -
vention measures provided in Law 4335 (eg, to require the BoD of the credit institution to imple - ment one or more of the arrangements or meas - ures set out in the recovery plan or to require one or more members of the management body to be removed or replaced). The BoG has already endorsed the EBA guidelines on recovery plan indicators (BoG 222/1/2.11.2023). In addition, the competent resolution authority may take a resolution action where all the following condi - tions are met, regardless of whether an early intervention measure has been adopted: • the credit institution is failing or likely to fail; • there is no reasonable prospect that any alternative private sector measures or super - visory action would prevent the failure of such credit institution within a reasonable time - frame; and • a resolution action is necessary in the public interest. In particular, the resolution authorities may use one or more of the following resolution tools: • the power to transfer to a purchaser shares or other instruments of ownership issued by (or all of any assets, rights or liabilities of) the credit institution under resolution (the “sale of business” tool); • the power to transfer to a bridge institution, which shall be a legal person that is wholly or partially owned by one or more public authorities and controlled by the resolution authority, shares or other instruments of own- ership issued by (or all of any assets, rights or liabilities of) the credit institution under resolu - tion (the “bridge institution” tool); • the power to transfer the assets, rights or liabilities of the credit institution under resolu - tion or of a bridge institution to one or more
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