EBA consults on estimation of Pillar 2 and combined buffer requirements for the purpose of setting MREL

The European Banking Authority (EBA) launched today a public consultation on its draft Regulatory Technical Standards (RTS) specifying the methodology to be used by resolution authorities to estimate the Pillar 2 (P2R) and combined buffer requirements (CBR)  at resolution group level for the purpose of setting the minimum requirement for own funds and eligible liabilities requirement (MREL) under the Bank Recovery and Resolution Directive (BRRD).The estimation of P2R and CBR is necessary for setting MREL when the resolution group perimeter differs significantly from the prudential perimeter at the level of which own fund requirements have been set by the competent authority. The consultation runs until 24 October 2020.

In particular, the EBA proposes a pragmatic approach aiming to create a framework to improve accuracy in setting the MREL requirement, without requiring sub-consolidation at resolution level and without blurring the lines of responsibilities between competent and resolution authorities in the capital setting process. 

Consultation process

Comments to this consultation can be sent to the EBA by clicking on the "send your comments" button on the consultation page. Please note that the deadline for the submission of comments is 24 October 2020.

The EBA will hold a public hearing on the draft RTS, which will take place via conference call on Tuesday 29 September 2020 from 10:00 CET. The dial in details will be communicated in due course.

All contributions received will be published following the closure of the consultation, unless specifically requested otherwise.

Legal basis and next steps

These draft RTS have been developed in accordance with Article 45c(4) of the BRRD, which mandates the EBA to develop draft RTS specifying the methodology to be used by resolution authorities to estimate the requirement referred to in Article 104a of Directive 2013/36/EU and the combined buffer requirement for resolution entities at the resolution group consolidated level for the purpose of setting MREL.