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Directive (EU) 2025/1 of the European Parliament and of the Council of 27 November 2024 establishing a framework for the recovery and resolution of insurance and reinsurance undertakings and amending Directives 2002/47/EC, 2004/25/EC, 2007/36/EC, 2014/59/EU and (EU) 2017/1132 and Regulations (EU) No 1094/2010, (EU) No 648/2012, (EU) No 806/2014 and (EU) 2017/1129 (Text with EEA relevance) article 37 CELEX: 32025L0001 Rate of conversion of debt to equity
Member States shall ensure that, when resolution authorities apply the write-down or conversion tool and exercise the power specified in Article 42(1), point (h), they may apply a different conversion rate to different classes of capital instruments and liabilities in accordance with one or both of the following principles: (a) the conversion rate represents appropriate compensation to the affected creditor for any loss incurred by virtue of the exercise of the write-down or conversion powers; (b) the conversion rate applicable to liabilities that are considered to be senior under applicable insolvency law is higher than the conversion rate applicable to subordinated liabilities. |