Regulatory Alerts2026-01-01
Decision on More Detailed Requirements for Setting the Rate of Conversion of Relevant Capital Instruments and Liabilities to Equity of a Credit Institution under Resolution
The Council of the Central Bank of Montenegro issued this Decision to prescribe detailed requirements for setting conversion rates of capital instruments and liabilities to equity during the application of the bail-in tool. The regulation mandates that conversion rates must ensure no creditor is worse off than in bankruptcy proceedings and strictly adheres to creditor hierarchy, allowing different rates only when necessary to meet resolution objectives. It further establishes strict criteria and justification requirements for the Central Bank to exclude or partially exclude specific liabilities from write-down or conversion powers.
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