NETHERLANDS Law and Practice Contributed by: Johannes de Jong and Juliet de Graaf, Osborne Clarke N.V.
bank and requiring certain decisions to be considered for adoption by the shareholders; • requiring one or more members of the man - agement body or senior management to be removed or replaced; and • requiring changes to the strategy, legal or operational structures. If the powers reflected above do not suffice, the DNB may impose the following (additional) measures: • the removal of the senior management or management body of the institution, in its entirety or with regard to individuals; or • the appointment of one or more temporary administrators to the bank. Phase 3: Resolution The BRRD provides for resolution tools. The aim of applying such tools is (i) to ensure the con - tinuity of critical functions; (ii) to avoid a signifi - cant adverse effect on the financial system; (iii) to minimise reliance on public financial support (ie, prevent a bailout); and (iv) to protect deposi - tors, client funds and client assets. Resolution tools can only be applied if all of the following conditions are met: • (i) the DNB determines that the bank is failing or is likely to fail; • (ii) there is no reasonable prospect that any alternative private sector measures, includ - ing the write-down or conversion of relevant capital instruments and eligible liabilities, would prevent the failure of the bank within a reasonable timeframe; and • (iii) resolution is necessary in the public inter - est.
As regards condition (i), a bank is failing or likely to fail if: • the bank infringes or likely will, in the near future, infringe the requirements for continu - ing authorisation in a way that would justify the withdrawal of the authorisation; • the assets of the bank are or will, in the near future, be less than its liabilities; • the institution is or will, in the near future, be unable to pay its debts or other liabilities as they fall due; or • extraordinary public financial support is required. The BRRD distinguishes four resolution tools, which may be applied individually or in any com - • The DNB can transfer the shares in the bank or (part of) the assets, rights or liabilities to a purchaser that is not a bridge institution. This transfer does not require shareholder con - sent. • If only the sale of business tool is used and only part of the assets are transferred, the bank and its remaining assets/activities shall be wound up under normal insolvency pro - ceedings. The bridge institution tool • The DNB can transfer the shares in the bank or (part of) the assets, rights or liabilities to a bridge institution. This transfer does not require shareholders consent. • A bridge institution must be wholly or partially owned by one or more public authorities and is controlled by the DNB. • The purpose of the bridge institution is main - taining access to critical functions of the bank and selling the bank. bination, as outlined below. The sale of business tool
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