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.
Keywords: Europe, EU, Banking, MREL, MREL Dashboard, Resolution Framework, Regulatory Capital, Basel, BRRB, SRB
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