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Resolution activities

Law 102/2019, unanimously approved on June 14, 2019 by the Great and General Council, has as its main purpose to preserve the stability of the financial system by introducing alternative tools to the compulsory liquidation of the bank if the state of failure is established, which would have highly negative consequences for depositors and employees, undermining confidence in the banking sector with risks of contagion to other intermediaries.

The resolution procedure is based on the following principles:

  • the preliminary removal of the bank's deficit, understood as the negative difference between assets and liabilities;
  • for the purpose of removing the deficit, there is a precise order of graduation of the loss-bearing parties:
    • first, the bank's shareholders, with zeroing of shares and extinguishment of administrative and property rights, and subordinated loan holders;
    • secondly, the reductions in liabilities provided for in Law No. 102/2019 are applied, affecting shareholders holding more than 25 percent of the capital, individuals residing in high-risk countries, individuals with final convictions for financial crimes, and individuals with debts to the state registered (not subject to appeal and/or deferred payment);
  • all those who in various capacities have contributed to the bankruptcy are liable for it in accordance with the law, including following the initiation of liability actions;
  • if the abatement of assets and reductions in liabilities do not allow for the elimination of the asset deficit, the State may intervene by adopting financial stabilization instruments under Articles 15 and 16 of Law No. 102/2019. In such cases, the proceeds of court actions and liability actions are channeled to the state or wholly owned companies that have taken on the deficit;
  • the Supervisory Authority may appoint new administrative and supervisory bodies of the bank in resolution to protect the public interest, with the aim of pursuing a speedy and orderly continuation of banking business while safeguarding corporate value in the interest of investors and employees.