On November 28, 2014, the European Banking Authority (“EBA”) published proposed draft regulatory technical standards (“RTS”) to further specify the criteria to be applied by national resolution authorities when setting a firm’s minimum requirement for own funds and eligible liabilities (“MREL”). The Banking Recovery and Resolution Directive (“BRRD”) requires firms to meet a MREL, which is to be set on a firm-by-firm basis by national resolution authorities. The MREL is intended to prevent firms from structuring their liabilities to hinder or delay the effectiveness of the bail-in or other resolution tools. The BRRD sets out certain criteria to be taken into account by resolution authorities when setting a firm’s MREL. The proposed draft RTS provide further details as to those criteria, aiming to ensure convergence on the application of the BRRD criteria across the EU so that firms with similar risk profiles and resolvability in any Member State have similar levels of MREL. Responses to the consultation are due by February 27, 2015.
The consultation paper is available at: