Featured Product

    EBA Finalizes MREL Reporting Standards for Resolution Authorities

    December 23, 2020

    EBA published the final draft implementing technical standards that specify uniform reporting templates, instructions, and methodology for identification and transmission of information, by resolution authorities to EBA, on minimum requirements for own funds and eligible liabilities (MREL). Reporting by institutions to resolution or competent authorities is outside the scope of this reporting framework. The previous technical standards on MREL reporting by resolution authorities to EBA will be replaced by these new draft technical standards, to account for changes introduced by the revised Bank Recovery and Resolution Directive or BRRD2 (2019/879/EU). EBA also published the draft reporting template and instructions as annexes to the final report on draft standards.

    The templates laid down in the annexes to the technical standards are to be used for reporting on each component of the decision in compliance with the methodology laid down in the BRRD. This information will help EBA in monitoring and promoting the consistent application of the legal framework on MREL. Where the MREL requirement has been waived in line with the BRRD, no additional information is necessary. If, on the other hand, MREL has not been waived but the recapitalization amount has been set to zero in line with Article 45c(2), second subparagraph, of the BRRD, simplified reporting is allowed. Resolution authorities will set a recapitalization amount equal to zero where the resolvability assessment concludes that liquidation under normal insolvency proceedings is feasible and credible. A zero recapitalization amount is likely to be the case for a significant number of smaller institutions. Where MREL has not been waived, because the recapitalization amount has been set to zero but the loss-absorbing amount has been adjusted, the draft standards require full reporting. Resolution authorities are required, on a best-effort basis, to provide a condensed explanation of the adjustments made to the default MREL amount. 

    BRRD (2014/59/EU) establishes a framework for the recovery and resolution of credit institutions, investment firms, and related entities. BRRD provides that resolution authorities, in cooperation with the relevant competent authorities, must ensure that institutions meet at all times a MREL. BRRD has been amended by BRRD2 to include provisions detailing new requirements on MREL subordination levels and the MREL applicable to resolution entities and entities that are not resolution entities. MREL must be set for each and every institution based on criteria laid down in the BRRD, as amended. This reporting between resolution authorities and EBA aims to ensure that EBA has all the necessary information to understand how MREL is set within the member states.


    Related Links

    Keywords: Europe, EU, Banking, MREL, Loss Absorbing Capacity, Implementing Technical Standards, Bail-In, Resolution Frameworks, Basel, BRRD2, EBA

    Featured Experts
    Related Articles

    OSFI Finalizes on Climate Risk Guideline, Issues Other Updates

    The Office of the Superintendent of Financial Institutions (OSFI) is seeking comments, until May 31, 2023, on the draft guideline on culture and behavior risk, with final guideline expected by the end of 2023.

    March 12, 2023 WebPage Regulatory News

    BIS Paper Examines Impact of Greenhouse Gas Emissions on Lending

    BIS issued a paper that investigates the effect of the greenhouse gas, or GHG, emissions of firms on bank loans using bank–firm matched data of Japanese listed firms from 2006 to 2018.

    March 03, 2023 WebPage Regulatory News

    HMT Mulls Alignment of Ring-Fencing and Resolution Regimes for Banks

    The HM Treasury (HMT) is seeking evidence, until May 07, 2023, on practicalities of aligning the ring-fencing and the banking resolution regimes for banks.

    March 02, 2023 WebPage Regulatory News

    BCBS Report Examines Impact of Basel III Framework for Banks

    The Basel Committee on Banking Supervision (BCBS) published results of the Basel III monitoring exercise based on the June 30, 2022 data.

    February 28, 2023 WebPage Regulatory News

    PRA Consults on Prudential Rules for "Simpler-Regime" Firms

    Among the recent regulatory updates from UK authorities, a key development is the first-phase consultation, from the Prudential Regulation Authority (PRA), on simplifications to the prudential framework that would apply to the simpler-regime firms.

    February 28, 2023 WebPage Regulatory News

    DNB Publishes Multiple Reporting Updates for Banks

    DNB, the central bank of Netherlands, updated the list of additional reporting requests and published additional data quality checks and XBRL-Formula linkbase documents for the first quarter of 2023.

    February 28, 2023 WebPage Regulatory News

    NBB Sets Out Climate Risk Expectations, Issues Reporting Updates

    The National Bank of Belgium (NBB) published a communication on climate-related and environmental risks, issued an update on XBRL reporting

    February 24, 2023 WebPage Regulatory News

    EBA Updates Address Securitization Standards and DGS Guidelines

    The European Banking Authority (EBA) published the final draft of the regulatory technical standards that set out conditions for assessment of homogeneity of the underlying exposures in simple, transparent, and standardized (STS) securitizations.

    February 21, 2023 WebPage Regulatory News

    FSB Publishes Letter to G20, Sets Out Work Priorities for 2023

    The Financial Stability Board (FSB) published a letter intended for the G20 Finance Ministers and Central Bank Governors, highlighting the work that FSB will take forward under the Indian G20 Presidency in 2023

    February 20, 2023 WebPage Regulatory News

    ISSB Standards May Become Effective from January 2024

    The International Organization of Securities Commissions (IOSCO) welcomed the confirmation statement by the International Sustainability Standards Board (ISSB) setting out its progress in the development of its first sustainability-related corporate disclosure standards.

    February 17, 2023 WebPage Regulatory News
    RESULTS 1 - 10 OF 8792