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SRB confirms changes to MREL policy for MPE banking groups

On 22 September 2022, SRB confirmed a change in its MREL policy applying to Multiple Point of Entry (MPE) banking groups. In particular, SRB will amend how surplus capital (in the form of MREL eligible liabilities), held in third country subsidiaries within European banking groups with MPE resolution strategy, will be treated in the calibration of MREL requirements on the EU parent entity level. Consequently, this introduction will by tendency potentially lead to higher MREL requirements.

Any surplus can only be taken into consideration towards the EU parent's MREL requirement if the subsidiary is in a country with an effective resolution framework that meets both the standards of the ‘Key Attributes of Effective Resolution Regimes for Financial Institutions’ and the TLAC term sheet. A surplus of a subsidiary that meets this criterion and is recognised by the resolution authority should be deducted from the MREL requirement that the parent has to fulfil in accordance with Article 72e(4) of the CRR.

EU banks will be able to recognize MREL surpluses in third countries that do not yet have a resolution regime during a transition period until 31 December 2024 if at least one of the following conditions is met:

  • Legal or practical restrictions do not hinder an asset transfer from subsidiary to parent institution.
  • The relevant third country authority informed SRB that assets equal to the deduction to be made by the subsidiary could be transferred to the parent entity in accordance with CRR Article 72e(4).

To transfer assets from the resolution group of the third country subsidiary to the Banking Union resolution group of the parent institution, the SRB specified, that banks need to give a legal opinion stating that there are no practical or legal obstacles.

As of 1 January 2025, the regulations will be fully applicable, after that point, SRB will stop considering surpluses in the relevant third countries when evaluating a bank's MREL requirement if it still does not have an internationally compliant resolution system in place.

In this respect it is key to proactively address this issue within internal planning procedures and in the dialogue with the resolution authority to manage MREL needs cost-efficiently within the banking group.


For inquiries please contact:

RBI Regulatory Advisory

Raiffeisen Bank International AG | Member of RBI Group | Am Stadtpark 9, 1030 Vienna, Austria  | Tel: +43 1 71707 - 5923