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
EC published the Implementing Regulation 2021/763 that lays down implementing technical standards for supervisory reporting and public disclosure of the minimum requirement for own funds and eligible liabilities (MREL).
APRA announced the standardization of quarterly reporting due dates for authorized deposit-taking institutions.
The private sector working group of ECB on euro risk-free rates published the recommendations to address events that would trigger fallbacks in the Euro Interbank Offered Rate (EURIBOR)-related contracts, along with the €STR-based EURIBOR fallback rates (rates that could be used if a fallback is triggered).
Bundesbank published a list of "EntryPoints" that are accepted in its reporting system; the list provides taxonomy version and name of the module against each EntryPoint.
EBA published the phase 1 of its reporting framework 3.1, with the technical package covering the new reporting requirements for investment firms (under the implementing technical standards on investment firms reporting).
Asia Pacific Australia Banking APS 111 Capital Adequacy Regulatory Capital Basel RBNZ APRA
ESMA published the final guidelines on outsourcing to cloud service providers.
EBA published annual data for two key concepts and indicators in the Deposit Guarantee Schemes (DGS) Directive—available financial means and covered deposits.
OSFI has set out the schedule for release of draft guidance on the management of technology risks by federally regulated financial institutions and private pension plans.
MAS updated rules for new housing loans by banks and finance companies.