SRB, along with the Banking Union national resolution authorities, published the 2018 policy statement on the minimum requirement for own funds and eligible liabilities (MREL). This policy statement serves as a basis for setting binding consolidated MREL targets for banks under the remit of SRB, pertaining to the first wave of resolution plans.
MREL represents one of the key tools in enhancing the resolvability of banks. For this year, considering the need to address the specificities of the most complex groups (with more details), SRB has split the cycle for resolution planning into two waves. The first wave started in January 2018 to allow for the banks that did not have binding targets—those without presence outside the Banking Union—to be addressed first based on the MREL policy largely following the 2017 approach. The 2018 SRB policy serves as a point of reference for the determination of SRB decisions on MREL for these banks.
For the most complex banks, all of them having resolution colleges, the development of the MREL policy will continue in 2018 for the second wave of resolution plans. To improve resolvability of banks and tailor the calibration of MREL targets to bank-specific characteristics, SRB will update its general MREL policy, with focus on subordination, eligible instruments, and individual MREL targets.
Keywords: Europe, Banking, MREL, Policy Statement, Resolution Planning, SRB