SRB updated its policy on minimum requirement for own funds and eligible liabilities (MREL) as a result of the revisions in the recent Banking Package. The package includes the revised Capital Requirements Directive (CRD V or EU Directive 2019/878), the revised Capital Requirements Regulation (CRR 2 or Regulation 2019/876), the revised Bank Recovery and Resolution Directive (BRRD 2 or Directive (EU) 2019/879), and the revised Single Resolution Mechanism Regulation (SRMR II or Regulation (EU) 2019/877). This policy update is an addendum to the 2018 SRB MREL policy for the second wave of resolution plans, which was published on January 16, 2019. The policy update covers the CRR 2 provisions , which will become applicable on June 27, 2019.
The policy update applies to all institutions for which MREL decisions have or will be taken for the 2018 and 2019 resolution planning cycles. The addendum is intended to inform institutions in the SRB remit about regulatory changes in CRR 2 in the area of resolution and their interaction with the MREL decisions of SRB. With this addendum, SRB is also informing institutions about the implementation of CRR provisions related to the total loss-absorbing capacity (TLAC) requirements for global systemically important institutions (G-SIIs) as well as the permission regime under Article 78a of CRR, which is applicable to all institutions.
The major elements of the new MREL framework, other than the TLAC requirement, will become applicable on December 28, 2020. National transposition and application of BRRD 2 by member states will also be due by December 28, 2020. Until then, MREL decisions issued by SRB, including any applicable transition periods, will be based on the current legal framework of SRMR (Regulation No 806/2014) and BRRD (Directive 2014/59/EU), implemented via the 2018 MREL policy of SRB for the second wave of resolution plans. SRB intends to publish, by the beginning of 2020, the "MREL Policy 2020,” which will form the basis for MREL setting under the new framework of BRRD 2/SRMR 2 for all institutions in the resolution planning cycle starting in 2020. SRB expects to communicate these future MREL decisions to banks in early 2021.
Effective Date: June 27, 2019
Keywords: Europe, EU, Banking, MREL, TLAC, G-SII, Basel III, Systemic Risk, Resolution Framework, CRR2, SRMR2, BRRD2, SRB
Previous ArticlePRA Consults on PRA110 Reporting Frequency Threshold
MAS and Temasek jointly released a report to mark the successful conclusion of the fifth and final phase of Project Ubin, which focused on building a blockchain-based multi-currency payments network prototype.
PRA published a public working draft, or PWD, of version 1.2.0 of the BoE Insurance XBRL taxonomy, along with the related technical artefacts.
CPMI published a report that sets out nineteen building blocks for a global roadmap to improve cross-border payments.
EBA published phase 2 of the technical package on the reporting framework 2.10, providing the technical tools and specifications for implementation of EBA reporting requirements.
APRA updated the lists of the Direct to APRA (D2A) validation rules for authorized deposit-taking institutions, insurers, and superannuation entities.
PRA updated the statement that provides guidance to regulated firms on implementation of the EBA guidelines on reporting and disclosure of exposures subject to measures applied in response to the COVID-19 crisis.
EBA updated the 2019 list of closely correlated currencies that was originally published in December 2013.
ESMA published the final report on the guidelines on securitization repository data completeness and consistency thresholds.
FASB issued a proposed Accounting Standards Update that would grant insurance companies, adversely affected by the COVID-19 pandemic, an additional year to implement the Accounting Standards Update No. 2018-12 on targeted improvements to accounting for long-duration insurance contracts, or LDTI (Topic 944).
APRA updated the regulatory approach for loans subject to repayment deferrals amid the COVID-19 crisis.