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
BCL Publishes Documentation for AnaCredit Reporting in July 2022Related Articles
US Agencies Issue Several Regulatory and Reporting Updates
The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.
ECB Issues Multiple Reports and Regulatory Updates for Banks
The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.
HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements
The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.
EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR
The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.
CBIRC Revises Measures on Corporate Governance Supervision
The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.
HKMA Publications Address Sustainability Issues in Financial Sector
The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.
EBA Updates Address Basel and NPL Requirements for Banks
The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.
ESMA Publishes 2022 ESEF XBRL Taxonomy and Conformance Suite
The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.
FCA Sets up ESG Committee, Imposes Penalties, and Issues Other Updates
The Financial Conduct Authority (FCA) is seeking comments, until December 21, 2022, on the draft guidance for firms to support existing mortgage borrowers.
FSB Reports Assess NBFI Sector and Progress on LIBOR Transition
The Financial Stability Board (FSB) published a report that assesses progress on the transition from the Interbank Offered Rates, or IBORs, to overnight risk-free rates as well as a report that assesses global trends in the non-bank financial intermediation (NBFI) sector.
