Most EU resolution banks comply with the requirement aimed at supporting orderly resolution in case of failure, the EBA dashboard finds

The European Banking Authority (EBA) today published its Q4 2023 quarterly dashboard on minimum requirement for own funds and eligible liabilities (MREL), which discloses aggregated statistical information for 333 EU/EEA banks earmarked for resolution. All banks are meeting their MREL requirements in line with the Bank Recovery and Resolution (BRRD) deadline of 1 January 2024, except for 3 banks that reported technical shortfalls against this deadline. 23 banks have been granted a deadline extension. The amount of instruments coming to maturity over the next year for the sample reached EUR 207bn. 

• As of 31 December 2024, 307 banks out of a sample of 333 were meeting their MREL target.
• 3 banks reported a technical shortfall of EUR 226mn or 0.6% of their combined risk weighted assets (RWA), 0.07% of the total RWA of the sample – the shortfalls are understood to be resolved since then.
• 23 banks have been granted a transition period beyond 1 January 2024. Their combined outstanding shortfall reached EUR8.0bn or 1.6% of their combined RWAs or 0.1% of the total RWAs in of the sample.
• Banks in the sample reported EUR 207bn of MREL instruments becoming ineligible by the end of 2024 for maturity reasons. Those represent around 18.1% of MREL eligible instruments other than own funds.
• The number of banks earmarked for resolution has increased over the past year with 352 external MREL decisions received by the EBA in force as of 1 May 2024, against 309 as of 1 May 2023. This increase is essentially driven by small banks moving from liquidation to resolution.
• Transfer strategies continue to be the preferred option in terms of number of decisions (55%), while bail-in is the favoured option in terms of RWAs covered (94%).

Notes to the editors

The EBA is mandated by the BRRD to monitor the setting of MREL by authorities and the build-up of related resources by institutions.

MREL is the requirement that ensures that relevant EU institutions have sufficient loss absorbing capacity to support the execution of the preferred resolution strategy in case of failure.

The BRRD set 1 January 2024 as a deadline to meet MREL requirements except for those banks that recently changed resolution strategy, or those eligible for an extension in accordance with Art.45m of the BRRD.