Banking Union: Single Resolution Board reports on MREL

The Single Resolution Board (SRB), the resolution authority for participating Member States within the Banking Union, has published a report on its approach to minimum requirements for own funds (MREL) in 2016 and its next steps for the coming year.

The report sets out that the SRB's and national resolution authorities' (NRAs') preliminary approach in 2016 consisted of informative targets that sought to enable banks to prepare for their future MREL requirements. The SRB determined that a final MREL methodology would not be available in 2016 for two main reasons:

• MREL is not a common regulatory standard but more a Pillar 2 instrument; and
   
• the current rules under the EU Commission's Delegated Regulation, published in May 2016, are likely to be changed due to the Commission's proposal on total loss-absorbing capacity (TLAC) and MREL published in November 2016.

The SRB intends to develop its MREL policy in 2017 with a view to setting binding MREL targets for the most systemic banking groups in the Banking Union. It also intends to develop additional policies and methodologies in respect of MREL, based on existing legislation and other relevant regulatory developments.