SRB Examines MREL Data for First Quarter of 2022
The Single Resolution Board (SRB) published dashboard on the minimum requirement for own funds and eligible liabilities (MREL). The dashboard, which covers data for the first quarter of 2022, focuses on the evolution of MREL targets for resolution entities and non-resolution entities as well as the stock of MREL instruments and shortfalls in the first quarter of 2022. The dashboard also highlights recent developments in funding cost and provides an overview of the gross issuance of MREL instruments in the first quarter of 2022.
The dashboard shows that the average MREL shortfall with respect to the final 2024 targets when considering the combined buffer requirement increased in comparison to the fourth quarter of 2021 for resolution entities, while remaining below the level registered in first quarter of 2021. The average MREL final target (2024) for resolution entities under the SRB remit stood at 23.3% of the total risk exposure amount and at 26.3% when considering the combined buffer requirement, in addition to the risk-based MREL—both showing a slight increase with respect to the previous quarter. This increase was largely driven by the marked increase of the leverage ratio exposure measure base of the MREL requirement for a few entities, due to the increase in cash deposits placed at the central bank and interbank market. The average MREL shortfall with respect to the final 2024 targets (including the combined buffer requirement) stood at 0.5% of the total risk exposure amount (or about EUR 36.7 billion), growing with respect to the fourth quarter of 2021 by EUR 4.7 billion, but remaining below the level registered in first quarter of 2021. For non-resolution entities, the average MREL shortfall including the combined buffer requirement continued the decreasing trend observed in the previous quarter, although at a slower pace. The level of gross MREL issuance in the first quarter of 2022 increased with respect to the previous quarter as well as year-on-year and almost all banks met the 2022 intermediate MREL targets, while very few banks with a shortfall are being closely monitored.
Related Links
Keywords: Europe, EU, Banking, MREL, MREL Dashboard, Resolution Framework, Regulatory Capital, Basel, BRRB, SRB
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
APRA Announces Revisions to Capital Framework for BanksNext Article
CBB Issues Amendments to Outsourcing RequirementsRelated 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.