1. Having regard to the impact that the failure of the institution could have, due to the nature of its business, its shareholding structure, its legal form, its risk profile, size and legal status, its interconnectedness to other institutions or to the financial system in general, the scope and the complexity of its activities, its membership of an IPS or other cooperative mutual solidarity systems as referred to in Article 113(7) of Regulation (EU) No 575/2013 and any exercise of investment services or activities as defined in point (2) of Article 4(1) of Directive 2014/65/EU, and whether its failure and subsequent winding up under normal insolvency proceedings would be likely to have a significant negative effect on financial markets, on ...[+++] other institutions, on funding conditions, or on the wider economy, Member States shall ensure that competent and resolution authorities determine:

When the resolution tools referred to in points (a), (b) or (c) of paragraph 2are applied, and they are used to partially transfer assets, rights or liabilities of the institution under resolution, the residual part of the institution from which the assets, rights or liabilities have been transferred, shall be wound up under normal insolvency proceedings within a time frame that is appropriate having regard to any need for that institution to provide services or support pursuant to Article in order to enable the transferee to carry on the activities or services acquired by virtue of that transfer.

(37)Where the resolution tools have been used to transfer the systemically important services or viable business of an institution to a sound entity such as a private sector purchaser or bridge institution, the residual part of the institution should be liquidated within an appropriate time frame having regard to any need for the failed institution to provide services or support to enable the purchaser or bridge institution to carry on the activities or services acquired by virtue of that transfer.

5.When the resolution tools referred to in points (a), (b) or (c) of paragraph 2are applied, and they are used to partially transfer assets, rights or liabilities of the institution under resolution, the residual part of the institution from which the assets, rights or liabilities have been transferred, shall be wound up under normal insolvency proceedings within a time frame that is appropriate having regard to any need for that institution to provide services or support pursuant to Article 58 in order to enable the transferee to carry on the activities or services acquired by virtue of that transfer.

Given the regime introduced by this Directive, it is appropriate to amend the definition of credit institution in Directive 2006/48/EC in order to ensure that electronic money institutions are not considered to be credit institutions.

4. Furthermore, the competent authorities may allow the offsetting provided for in paragraph 1 between institutions within a group that fulfil the conditions imposed in paragraph 3 and any institution included in the same group which has been authorised in another Member State provided that that institution is obliged to fulfil the capital requirements imposed in Articles 18, 20 and 28 on an individual basis.