diff --git a/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/genericsHighlighting/WideningCastToTypeParam.java b/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/genericsHighlighting/WideningCastToTypeParam.java
index 78f5f589beed..7615d72908e3 100644
--- a/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/genericsHighlighting/WideningCastToTypeParam.java
+++ b/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/genericsHighlighting/WideningCastToTypeParam.java
@@ -31,3 +31,21 @@ public class Test {
     IConverter<String> converter2 = <error descr="Inferred type 'java.lang.String' for type parameter 'C' is not within its bound; should extend 'java.lang.Double'">getConverter2(String.class)</error>;
   }
 }
+
+
+class Z {
+
+}
+
+class TestNonNarrowingConversion<T extends Z> {
+    public TestNonNarrowingConversion(T u) {
+
+    }
+
+    public T z = null;
+
+    public int a() {
+        <error descr="Incompatible types. Found: 'TestNonNarrowingConversion<Z>', required: 'TestNonNarrowingConversion<T>'">TestNonNarrowingConversion<T> x = new TestNonNarrowingConversion<Z>(new Z());</error>
+        return 1;
+    }
+}
diff --git a/java/openapi/src/com/intellij/psi/util/TypeConversionUtil.java b/java/openapi/src/com/intellij/psi/util/TypeConversionUtil.java
index c5cd6ca8aedd..22991fddf6ed 100644
--- a/java/openapi/src/com/intellij/psi/util/TypeConversionUtil.java
+++ b/java/openapi/src/com/intellij/psi/util/TypeConversionUtil.java
@@ -207,7 +207,7 @@ public class TypeConversionUtil {
     final LanguageLevel languageLevel = toClassType.getLanguageLevel();
     if (!fromClass.isInterface()) {
       if (toClass.isInterface()) {
-        return !fromClass.hasModifierProperty(PsiModifier.FINAL) &&
+        return (!fromClass.hasModifierProperty(PsiModifier.FINAL) || fromClass.isInheritor(toClass, true))&&
                checkSuperTypesWithDifferentTypeArguments(toResult, fromClass, manager, fromResult.getSubstitutor(), null, languageLevel);
       }
       else {
@@ -337,6 +337,13 @@ public class TypeConversionUtil {
       PsiType typeArg2 = substitutor2.substitute(typeParameter);
       if (typeArg1 == null || typeArg2 == null) return true;
       if (TypesDistinctProver.provablyDistinct(typeArg1, typeArg2)) return false;
+
+      final PsiClass class1 = PsiUtil.resolveClassInType(typeArg1);
+      if (class1 instanceof PsiTypeParameter) {
+        for (PsiType type : class1.getExtendsListTypes()) {
+          if (TypesDistinctProver.provablyDistinct(type, typeArg2)) return false;
+        }
+      }
     }
 
     return true;
@@ -867,14 +874,6 @@ public class TypeConversionUtil {
       }
     }
     else {
-      final PsiClass leftClass = PsiUtil.resolveClassInType(typeLeft);
-      if (leftClass instanceof PsiTypeParameter) {
-        for (PsiClassType leftClassType : leftClass.getExtendsListTypes()) {
-          if (TypesDistinctProver.provablyDistinct(leftClassType, typeRight)) return false;
-        }
-        if (!(typeRight instanceof PsiCapturedWildcardType || typeRight instanceof PsiWildcardType)) return true;
-      }
-
       return typeLeft.equals(typeRight);
     }
   }
diff --git a/plugins/groovy/src/org/jetbrains/plugins/groovy/lang/resolve/processors/MethodResolverProcessor.java b/plugins/groovy/src/org/jetbrains/plugins/groovy/lang/resolve/processors/MethodResolverProcessor.java
index f8e017188178..a2865e72fb02 100644
--- a/plugins/groovy/src/org/jetbrains/plugins/groovy/lang/resolve/processors/MethodResolverProcessor.java
+++ b/plugins/groovy/src/org/jetbrains/plugins/groovy/lang/resolve/processors/MethodResolverProcessor.java
@@ -408,8 +408,8 @@ public class MethodResolverProcessor extends ResolverProcessor {
       if (argTypes != null && argTypes.length > i) {
         PsiType argType = argTypes[i];
         if (argType != null) {
-          final boolean converts1 = TypesUtil.isAssignable(type1, argType, manager, scope, false);
-          final boolean converts2 = TypesUtil.isAssignable(type2, argType, manager, scope, false);
+          final boolean converts1 = TypesUtil.isAssignable(TypeConversionUtil.erasure(type1), argType, manager, scope, false);
+          final boolean converts2 = TypesUtil.isAssignable(TypeConversionUtil.erasure(type2), argType, manager, scope, false);
           if (converts1 != converts2) {
             return converts2;
           }