- Takes account of new regulatory changes & feedback received from stakeholders
- Makes subordination policy more dynamic
- Complements the SRB approach on internal MREL waivers
The Single Resolution Board has today published its updated approach to setting a Minimum Requirement for Own Funds and Eligible Liabilities (MREL). The policy has been revised based on experience gained and stakeholder feedback and applies to the 2022 resolution planning cycle.
“Today’s updated document is the latest step forward in the development of our MREL policy, and provides transparency to stakeholders. MREL is a vital tool in ensuring that the resolution plans the SRB has carefully drafted can actually spring into action at very short notice. Therefore MREL plays a key role in improving a bank’s resolvability, and resolvability is one of the core functions of the Single Resolution Board.” – SRB Chair Elke König.
The policy takes into account new regulatory developments, such as the end of the supervisory leverage relief measures of the European Central Bank, as well as changes to the Capital Requirement Regulation (CRR) recently agreed by the EU co-legislators on the indirect holding of internal MREL (iMREL) and the MREL calibration for banks with a multiple point-of-entry resolution strategy.
The policy has also further enlarged the coverage of entities under internal MREL and made the subordination policy more dynamic, taking into account evolving balance sheets prior to resolution. It also complements the SRB approach to internal MREL waiver applications in a new annex.
Given the limited nature of the changes, the SRB also publishes a version in track changes to show the updated sections clearly.
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