- Question ID
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2019_4863
- Legal act
- Directive 2014/59/EU (BRRD)
- Topic
- MREL
- Article
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45c
- COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
- Not applicable
- Article/Paragraph
-
-
- Type of submitter
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Resolution authority
- Subject matter
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Interplay between subordination and calibration for MREL
- Question
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Shall subordination and calibration requirements set out in Art. 45b and 45c BRRD be met at all times, independently from each other?
- Background on the question
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The subordination requirement set out in Art. 45b BRRD introduces specified levels of subordination for various categories of banks. The calibration requirement set out in Art. 45c BRRD also specifies how MREL targets should be calibrated, following different approaches and formulas. Recital 10 specifies that resolution authorities should be able to require that a part of the MREL equal to the level of loss absorption and recapitalisation referred to in the relevant articles is met with subordinated instruments. This reference is also introduced in Art. 45b(4) BRRD stating that resolution authorities shall ensure that a part of the requirement equal to 8 % of the total liabilities including own funds shall be met by certain banks with subordinated instruments. The interaction between these provisions should be clarified, to define whether subordination is a component of the calibration requirement, or shall be met independently. The question is also valid for the relevant SRMR provisions.
- Submission date
- Rejected publishing date
-
- Rationale for rejection
-
Please note that as part of adjustments to the Single Rulebook Q&A process, agreed by the EBA and the European Commission, it has been decided to reject outstanding questions submitted before 1 January 2020, when the Q&A process was updated as part of the last ESAs Review. In particular, the question that you have submitted has now regrettably been rejected and will not be addressed.
If you believe your question would still benefit from clarification, you are invited to resubmit your question, adapting it to reflect any legislative, regulatory or other relevant developments that may have occurred since the initial date of submission. The EBA will aim to address resubmitted questions as a matter of priority. When considering to resubmit, you are kindly requested to observe the updated admissibility criteria agreed in the context of the adjustment of the Q&A process, available in the Additional background and guidance for asking questions. We hope for your understanding.
For further information please refer to the press release and the updated Q&A page.
- Status
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Rejected question