Recital 7

(7) Competent authorities should have the necessary power to withdraw the authorisation granted to a credit institution where such a credit institution has been determined as failing or likely to fail, there is no reasonable prospect that any alternative private sector measures or supervisory action would prevent a failure of such a credit institution within a reasonable timeframe and a resolution action is not necessary in the public interest. In such a situation, a credit institution should be wound up in accordance with the applicable national insolvency proceedings, or with other types of proceedings laid down for those institutions under national law, which would ensure its orderly exit from the market, and should therefore discontinue the activities for which the authorisation had been granted. However, there should be no automatic link between the failing or likely to fail determination and the withdrawal of the authorisation, as for other cases where the competent authority is entitled to withdraw the authorisation. Competent authorities should exercise their powers in a manner that is proportionate and that takes into consideration the features of the applicable national insolvency proceedings, including existing judicial procedures. The power to withdraw the authorisation should not be used to prevent the opening, or force the termination, of insolvency proceedings, such as the application of a judicial moratorium or other measures which are conditional upon an active licence.

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Source: EUR-Lex CELLAR · retrieved 2026-09-04 · Text as adopted (Official Journal); later amendments are not incorporated in this text.