MREL: EBA expresses dissent over EU Commission proposals to amend RTS

The European Banking Authority (EBA) has published an opinion addressed to the EU Commission expressing dissent over some of its proposed amendments to the EBA final draft regulatory technical standards (RTS) on the criteria for setting the minimum requirement for own funds and eligible liabilities (MREL), which were developed under Article 45(2) of the Bank Recovery and Resolution Directive (BRRD) and were submitted to the Commission for endorsement on 3 July 2015. On 18 December 2015, the Commission informed the EBA of its intention to amend the final draft RTS.

In particular, the EBA dissents from EU Commission proposals to:

• amend the reference to the burden-sharing requirement by shareholders and creditors of institutions of significant importance due to its view that legal clarity is needed when setting MREL for a systemic institution which may need to access resolution funds; and
   

remove several specific provisions relating to the criteria for setting MREL for systemic institutions, which in the EBA's opinion may reduce the effectiveness of the RTS in promoting smooth cooperation and convergence when setting MREL.