Single Rulebook Q&A

Question ID: 2017_3207
Legal act : Directive 2014/59/EU (BRRD) as amended
Topic : MREL
Article: 45
Paragraph: (4)
Subparagraph:
Article/Paragraph : n.a.
COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
Type of submitter: Competent authority
Subject matter : Eligible liabilities for the purpose of MREL
Question:

Can only eligible liabilities counting towards MREL be bailed in?

Background on the question:

Article 45(4) of Directive 2014/59/EU (BRRD) states what kind of liabilities could be considered as eligible liabilities for the purpose of meeting the MREL. It is however not clear in case a liability does not qualify as an eligible liability for the MREL that such a liability could be subject to the bail-in tool.

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

Liabilities which can by bailed in in resolution are referred to as 'eligible liabilities' and are defined in Article 2(71) of Directive 2014/59/EU (BRRD). In order for “eligible liabilities” to be qualifying for the purpose of complying with MREL, they need to meet a set of additional criteria set out in Article 45(4) of BRRD. Hence, a broader pool of liabilities than those which are eligible for MREL could be bailed in in resolution.

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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