In a recent article, the SRB Chair Elke König offers clarity on the Board's approach to minimum requirements for own funds and eligible liabilities (MREL) targets, in light of the COVID-19 crisis. Regarding the existing binding targets (set in the 2018 and 2019 cycles), during the current crisis, SRB intends to take a forward-looking approach to banks that may face difficulties meeting those targets before new decisions (with 2022 intermediate targets) take effect. The focus will be on the 2020 decisions and targets. SRB requests banks to continue to make all efforts to provide the necessary data on MREL for the upcoming cycle.
The SRB Chair highlights that the banking industry has made substantial progress in building up MREL to date and overall it is in a good position today. Nevertheless, during this challenging period, SRB is committed to ensuring that short-term MREL constraints do not prevent banks from lending to business and the real economy. To achieve this, SRB is working together with the national resolution authorities and the banks under its remit to prepare for the implementation of the 2020 resolution planning cycle, including, the changes to MREL decisions under the new banking package (BRRD2/SRMR2). As part of this cycle, new MREL targets will be set according to the transition period in SRMR2—that is, setting the first binding intermediate target for compliance by 2022 and the final target by 2024. The decisions will be based on recent MREL data, and reflect changing capital requirements.
Related Link: Article by SRB Chair
Keywords: Europe, EU, Banking, MREL, BRRD2, SRMR2, COVID-19, Resolution Framework, Regulatory Capital, Banking Package, SRB
Previous ArticlePRA Explains Supervisory Approach to Credit Unions Amid COVID Crisis
HKMA announced that enhancements will be made to the Special 100% Loan Guarantee of the SME Financing Guarantee Scheme (SFGS) and the application period will be extended to December 31, 2021.
EBA launched consultations on the regulatory and implementing technical standards on cooperation and information exchange between competent authorities involved in prudential supervision of investment firms.
BoE has set out a three-phased plan to transform data collection from the UK financial sector over the next decade.
BIS recently made a couple of announcements with respect to the planned and ongoing work in the area of financial technology.
ESRB updated the list of national macro-prudential measures applied by each member state in the European Economic Area.
BoE has set out results of a survey on the impact of COVID-19 events on the use of machine learning and data science.
In response to a request from the European Council and Parliament, ECB published an opinion on the proposed regulation on markets in crypto-assets.
APRA announced the updated aggregate amounts for the 2021 Committed Liquidity Facility (CLF) established between the Reserve Bank of Australia (RBA) and certain locally incorporated authorized deposit-taking institutions that are subject to the Liquidity Coverage Ratio (LCR).
ECB published supervisory Memorandums of Understanding (MoUs) with UK as well as other European and non-European authorities.
EIOPA identified business model sustainability and adequate product design as the two EU-wide strategic supervisory priorities.