5.The resolution authority may set a loss absorption amount using either of the following methods:
(a)a loss absorption amount equal to the default loss absorption amount determined in accordance with paragraph 4;
(b)a loss absorption amount, which may be either:
(i)higher than the default loss absorption amount determined pursuant to paragraph (4) where:
—the need to absorb losses in resolution is not fully reflected in the default loss absorption amount, taking into account information requested from the competent authority relating to the institution's business model, funding model, and risk profile pursuant to Article 4, or
—it is necessary to reduce or remove an impediment to resolvability or absorb losses on holdings of MREL instruments issued by other group entities;
(ii)lower than the default loss absorption amount determined pursuant to paragraph (4) to the extent that, taking into account information received from the competent authority relating to the institution's business model, funding model, and risk profile pursuant to Article 4:
—additional own funds requirements referred to in paragraph 2(b), which have been determined on the basis of the outcome of stress tests or to cover macroprudential risks, are assessed not to be relevant to the need to ensure losses can be absorbed in resolution, or
—part of the combined buffer requirement referred to in paragraph 2(c) is assessed by the resolution authority not to be relevant to the need to ensure losses can be absorbed in resolution.