On 17 February, the Single Resolution Board (SRB) launched a public consultation on changes to its policy on the Minimum Requirement for Own Funds and Eligible Liabilities (MREL). The new MREL policy is based on the so-called “Banking Package” adopted within the EU in June 2019, which involved amendments to the Bank Recovery and Resolution Directive (BRRD).
Objectives of the new MREL policy include, among other things:
- aligning the calculation basis of MREL with parameters used in capital adequacy calculation
- revising the qualitative requirements for MREL by ordering that the requirement is met increasingly by subordinated liabilities
- clarifying the requirements for certain conglomerate structures (e.g. amalgamations of deposit banks) and subsidiaries of banking groups, and
- determining the transitional periods applicable to the MREL requirements.
This is the first time when the SRB has a public consultation on proposed changes to its MREL policy. Based on the comments received, the SRB will finalise its renewed MREL policy, which is intended to be published before the end of June 2020. This policy will be the basis for MREL decisions to be prepared towards the end of 2020 and adopted in the first quarter of 2021.
The consultation will end on 6 March 2020 at noon (CET). Link to the
SRB consultation
