On September 3, 2016, a Commission Delegated Regulation in the form of RTS on the methodology for setting minimum requirement for own funds and eligible liabilities was published in the Official Journal of the European Union. MREL is the European equivalent of US TLAC. MREL will be set by resolution authorities for each firm so that resolution plans are effective and will be linked to the capital requirements of a firm. The Commission adopted the RTS in May 2016, amending the final draft RTS submitted by the EBA in 2015. The EBA agreed with some but not all of the Commission’s changes. For example, the EBA agreed that the RTS should not set a minimum contribution to loss absorption and recapitalization of 8% of total liabilities and own funds for systemic institutions, but proposed that the RTS should require resolution authorities to assess whether the burdensharing requirements set out in the BRRD would be met. The final RTS entered into force on September 26, 2016.
The RTS is available at: http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32016R1450&from=EN.