EBA Finalizes MREL Reporting Standards for Resolution Authorities
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
- Press Release
- Draft Technical Standards (PDF)
- Reporting Template (XLSX)
- Reporting Instructions (DOCX)
Keywords: Europe, EU, Banking, MREL, Loss Absorbing Capacity, Implementing Technical Standards, Bail-In, Resolution Frameworks, Basel, BRRD2, EBA
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Previous Article
DNB Issues Reporting Updates for Banks, Maintains CCyB at 0%Related Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
