EC Issues Regulation on MREL Requirements Under BRRD
EC published the Commission Implementing Regulation (EU) 2018/308 on formats, templates, and definitions for identification and transmission of information by resolution authorities for informing EBA about the minimum requirement for own funds and eligible liabilities (MREL). The Regulation 2018/308 lays down implementing technical standards for Bank Recovery and Resolution Directive, or BRRD (Directive 2014/59/EU) and shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.
Resolution authorities have been given the task of setting MREL, for each institution, in accordance with the requirements and the procedures laid down in Article 45 of BRRD, as further specified by Commission Delegated Regulation (EU) 2016/1450. Resolution authorities are required to inform EBA, in coordination with competent authorities, of the requirements they have set. Uniform formats, templates, and definitions for identification and transmission of that information to EBA should be designed in such a way that they facilitate the EBA monitoring of MREL decisions and ensure a meaningful assessment of convergence in approach across the EU.
In respect of groups that are subject to a consolidated MREL, it is necessary to clarify which resolution authority should transmit to EBA the information on, first, the MREL determined for the parent undertaking concerned, and second, the MREL applied to the subsidiaries, whether on the basis of a joint decision reached between the group-level resolution authority and the resolution authority responsible for the subsidiary on an individual basis, or of a decision taken by the resolution authority of the subsidiary in the absence of a joint decision. To promote convergence of practices regarding MREL decisions and to strengthen the monitoring role of EBA, uniform reporting periods and submission dates for transmission of information by the resolution authorities to EBA should be established.
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Effective Date: March 22, 2018
Keywords: Europe, EU, Banking, MREL, BRRD, Resolution Authorities, EBA, EC
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