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Banking resolution

Deposits guaranteed by the Bank Deposit Guarantee Fund (“FGDB”), up to the equivalent of EUR 100,000, are not subject to internal recapitalization, in case of a bank resolution procedure according to the provisions of Law no. 312/2015 on the recovery and resolution of credit institutions and investment firms, as well as for the amendment and completion of normative acts in the financial field in conjunction with the provisions of Law no. 311/2015 on deposit guarantee schemes and the Bank Deposit Guarantee Fund. In the event of such a procedure, the Bank will not be liable for the Client's receivables that exceed the amount guaranteed by FGDB and which could be recapitalized for the purpose of reducing, converting or canceling these receivables, according to the measures ordered by the competent authority.

For the purposes of this clause, “bank resolution” and “internal recapitalization” are defined as follows:
(i) the bank resolution is a process of restructuring a credit institution, which seeks to ensure the continuity of critical functions offered to its customers, restore its viability, liquidate the residual part of it through normal insolvency proceedings while maintaining financial stability. The process is managed by an authority designated by the legislator for this purpose, which has a specific set of tools and powers;
(ii) internal recapitalization, which is applicable in all EU countries of the European Union, is the instrument by which the resolution authority exercises powers to reduce the value and / or convert certain debts of the credit institution subject to resolution, in order to absorb losses and recapitalize the institution to a sufficient extent to comply with the authorization requirements.

Further details are available at this link.

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