Article 3 Definitions

For the purposes of this Regulation, the definitions provided for in Article 3 of Directive 2014/59/EU shall apply. For the purposes of this Regulation, the following definitions shall also apply:

1. (1)

   ‘Direct contagion’ means a situation where the direct losses of counterparties of the institution under resolution, resulting from the write-down of the liabilities of the institution, lead to the default or likely default for those counterparties in the F1immediate future.

2. (2)

   ‘Indirect contagion’ means a situation where the write-down or conversion of institution's liabilities causes a negative reaction by market participants that leads to a severe disruption of the financial system with potential to harm the real economy.

3. (3)

   F2‘Institution’ has the meaning given in section 3A(8) of the Act.

4. (4)

   ‘The resolution authority’ means the Bank of England.

5. (5)

   ‘The Act’ means the Banking Act 2009.

6. (6)

   ‘Bail-in’ means special bail-in provision within the meaning of section 48B of the Act and ‘bail-in tool’ means the power to make such provision.

7. (7)

   ‘Conditions for early intervention’ means the conditions specified in section 71D of the Financial Services and Markets Act 2000.