Swedish Government Proposes Changes to Crisis Management Rules

At this juncture, SNDO clarified how certain regulatory changes will affect the its work in the near future. The referral states that the decisions of SNDO on MREL requirements in accordance with the new regulations shall apply as of January 01, 2024. To enable a linear build-up to the requirements that are to be met in 2024, SNDO must also determine intermediate target levels that will apply until then. Until decisions in accordance with the new regulations have been made, the MREL requirements that have been set under the current regulations will apply. As a result of these proposals in the referral, SNDO intends to make new decisions on MREL requirements in accordance with the regular cycle for resolution planning—that is, in December 2021. For Swedish banks that are subsidiaries of foreign groups, the time of decision may deviate from this.

When SNDO makes new decisions, the previous requirements will be replaced by a target level, which will apply as of January 01, 2022, as well as by a requirement that will apply as of January 01, 2024. SNDO intends to, in good time before December, revert with an updated memorandum on the application of MREL describing in further detail how these requirements will be determined. The target levels will be decided taking into account the banks’ current requirements and compliance, to enable a linear build-up until January 01, 2024. SNDO also mentioned that it will, during the Spring, present a referral for consideration with proposals for regulations, so that these can come into force as the same time as the new legislative proposal.

Effective Date: July 01, 2021 (Proposed)

Keywords: Europe, Sweden, Banking, MREL, Resolution Framework, Banking Package, Resolution Planning, Crisis Management Framework, Bail-In, Regulatory Capital, Basel, SNDO