The EU’s banking resolution authority, the Single Resolution Board (SRB), has today outlined what it expects will happen after the UK formally leaves the EU.
Under the Withdrawal Agreement agreed between the UK and the EU27, there will be a Transition Period until the end of December 2020. During that period, EU law continues to apply to the UK.
The SRB has long been engaging with the banks under its remit to prepare for Brexit, and in November 2018 published its Brexit expectations document. During the transition period, MREL-eligible liabilities governed by UK law are treated as if they were governed by Member State law. After that, they will be treated as third country liabilities and may need additional clauses.
The impact of Brexit will be taken into consideration in the resolution planning work of the SRB, for the 2020 resolution planning cycle and beyond.
Speaking in Brussels, the SRB Chair, Elke König said: ‘There has been a significant lead-in time for Brexit, so bonds issued since 2016 onwards should have relevant clauses included already. Our focus is on ensuring that banks are resolvable and that we maintain good cooperation with authorities in the EU and outside it.’