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) "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 imminent.

(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.