Single Rulebook Q&A

Question ID: 2017_3205
Legal act : Directive 2014/59/EU (BRRD) as amended
Topic : MREL
Article: 45
Paragraph: (1)
Subparagraph:
Article/Paragraph : n.a.
COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
Type of submitter: Competent authority
Subject matter : Minimum requirements for own funds and eligible liabilities
Question:

Do all entities mentioned in Article 1(1) of Directive 2014/59/EU (BRRD) have to meet minimum requirements for own funds and eligible liabilities?

Background on the question:

Article 45(1) of Directive 2014/59/EU (BRRD) states that “Member States shall ensure that institutions meet, at all times, a minimum requirement for own funds and eligible liabilities.” Will this requirement have to be applied to all entities mentioned in Article 1(1) of Directive 2014/59/EU (BRRD)?

Date of submission: 07/03/2017
Published as Final Q&A: 17/03/2017
EBA answer:

A minimum requirement for own funds and eligible liabilities (MREL) does not apply to mortgage credit institutions financed by covered bonds when conditions referred to in Article 45(3) of Directive 2014/59/EU (BRRD) are met.

As regards entities referred to in points (b), (c) or (d) of Article 1 of BRRD, resolution authorities have discretion to decide, after consulting a competent authority, whether to apply MREL to them (see Article 45(7)).

Disclaimer:

This question goes beyond matters of consistent and effective application of the regulatory framework. A Directorate General of the Commission (Directorate General Financial Stability, Financial Services and Capital Markets Union) has prepared the answer, albeit that only the Court of Justice of the European Union can provide definitive interpretations of EU legislation. This is an unofficial opinion of that Directorate General, which the European Banking Authority publishes on its behalf. The answers are not binding on the European Commission as an institution. You should be aware that the European Commission could adopt a position different from the one expressed in such Q&As, for instance in infringement proceedings or after a detailed examination of a specific case or on the basis of any new legal or factual elements that may have been brought to its attention.

Status: Final Q&A
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