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09 February 2016

EBA expresses dissent over EU Commission proposed amendments to the MREL technical standards

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The EBA issued an Opinion to the EC expressing its dissent over some of its proposed amendments to the EBA final draft RTS on the criteria for setting the MREL and encouraging the prompt adoption of the standard.

On 3 July 2015, the European Banking Authority (EBA) submitted its final draft Regulatory Technical Standard (RTS) to the European Commission (EC), which included references to the conditions for accessing resolution, specific provisions for setting minimum requirement for own funds and eligible liabilities (MREL) for systemic institutions, and an option to set a limited compliance transition period.

On 17 December 2015, the EC proposed a number of amendments to the RTS submitted by the EBA. In particular, it proposed to amend the reference to the burden-sharing requirement by shareholders and creditors of institutions of significant importance. Although the EBA agrees with the Commission's argument that the RTS cannot set a harmonised level of MREL, it dissents from some of these amendments as it believes legal clarity and certainty is needed when setting MREL for a systemic institution which may need to access resolution funds.

In addition, the Commission proposed to remove several specific provisions relating to the criteria for setting MREL for systemic institutions, to the consultation between competent and resolution authorities on specific matters and the upper limit on the transitional compliance period. The EBA dissents from these amendments as it believes they would reduce the effectiveness of the RTS in promoting smooth cooperation and convergence when setting MRELs.

With this Opinion the EBA also calls on the Commission to promptly adopt these important RTS.

Press release

Full opinion


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