27 May 2021
The European Banking Authority (EBA) published today its second quantitative Report on minimum requirements for own funds and eligible liabilities (MREL) under the new methodology. The Report shows that as of December 2019, the largest institutions have made good progress in reducing MREL shortfalls and that smaller institutions tend to lag behind.
This Report reflects existing MREL policies applicable as at December 2019 and estimates the impact of BRRD II only for global systemically important institutions (GSIIs) and top-tier banks via the subordination levels.
An estimated 80% of the EU’s domestic assets are covered by a strategy other than liquidation –stable compared to 80% last year on a comparable basis. the number of decision has increased, thus reflecting the continued progress by resolution authorities in agreeing on resolution strategies and setting MREL, but also highlights the fact that more than six years after the adoption of the Bank Recovery and Resolution Directive (BRRD), authorities are still in the process of rolling-out resolution strategies and MREL requirements.
As at December 2019, out of the 238 resolution groups captured in this Report, 111 EU resolution groups showed an MREL shortfall estimated at EUR 102 bn, down from EUR 172 bn as of December 2018. In terms of total assets, institutions with a shortfall represent about 28% of EU total domestic assets.