Technical standards for contractual recognition of write-down and conversion powers

This regulation sets technical standards for how financial contracts recognize the power to write down or convert liabilities. This is a key part of the bank recovery and resolution framework, ensuring that if a bank fails, its losses can be managed predictably without causing a wider financial crisis.

This primarily affects banks, credit institutions, and institutional investors who hold debt or securities issued by these banks. It clarifies the legal terms under which their investments may be reduced or converted into equity.