Today, the Single Resolution Board (SRB) has published its minimum requirement for own funds and eligible liabilities (MREL) dashboard for Q1.2022.
“I am pleased, that despite the current economic uncertainty, banks continue to make progress in building up their levels of MREL. This is important funding that acts as a shock absorber in a time of crisis, and helps to ensure that the preferred strategy for dealing with a bank in trouble is available, and workable, at short notice,” said SRB Chair Elke König.
- For resolution entities, the average MREL final target including the combined buffer requirement (CBR), to be respected by 1 January 2024, amounted to 26.3% TREA, showing a slight increase with respect to Q4.2021.
- The average MREL shortfall with respect to the final 2024 targets (including the CBR) stood at 0.5% TREA (or about EUR 36.7 bn), growing with respect to Q4.2021 by EUR 4.7 bn, but remaining below the level registered in Q1.2021.
- For non-resolution entities, the average MREL shortfall (including the CBR) against the final target amounted to 0.9% TREA (or EUR 19.3 bn), continuing the decreasing trend observed in the previous quarter, albeit at a slower pace.
- As regards MREL intermediate 2022 targets (including the CBR), almost all banks met the requirements. The very few banks with a shortfall are being closely monitored.
- Notwithstanding the uncertain financial markets conditions in the first quarter of the year, SRB banks’ issuance volume amounted to EUR 84 bn, increasing by around 42% with respect to the last quarter of 2021 and by around 11% year-on-year.
- Given the geopolitical tensions and the volatility of financial markets, MREL funding costs deteriorated in the second quarter of 2022, resulting in a widening of spread levels.
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