PRA Updates SS16/16 on MREL Buffers and Threshold Conditions
PRA updated SS16/16 on the minimum requirement for own funds and eligible liabilities (MREL). This version of SS16/6 updates the version issued on November 8, 2016. SS16/16 was updated following the consultation paper CP15/17 titled “The minimum requirement for own funds and eligible liabilities (MREL) – buffers.”
In CP15/17, PRA had consulted on updates to SS16/16 to clarify its expectations on the:
- Amount of common equity tier 1 (CET1) capital that firms should not count simultaneously toward buffer requirements and MREL (that is, an amount equal to the size of the usable buffer derived from the two going-concern regimes)
- Consequences of not maintaining sufficient CET1 to meet both the usable buffer requirement and MREL
SS16/16 is aimed at PRA-regulated banks, building societies, and PRA-designated investment firms. It should be read in conjunction with the BoE’s statement of policy on its approach to setting MREL, PRA SS6/14 on capital buffers, and PRA SS31/15 on leverage buffers.
Related Link: Notification
Keywords: Europe, UK, Banking, MREL, CET1, SS16/16, Buffers and Threshold Conditions, PRA
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