This Act allows resolution authorities more flexibility in setting internal minimum requirements for own funds and eligible liabilities (MREL) in banking groups, in order to ensure sufficient loss-absorbing capacity. It also simplifies MREL treatment for liquidation entities and related prior permissions.
Today, the SRB publishes a communication on the changes to its MREL policy to be implemented in line with the Daisy Chains Act, which was adopted earlier this year.
This Act allows resolution authorities more flexibility in setting internal minimum requirements for own funds and eligible liabilities (MREL) in banking groups, in order to ensure sufficient loss-absorbing capacity. It also simplifies MREL treatment for liquidation entities and related prior permissions.
In particular, the amendments to Article 12d SRMR introduced by Article 2, points (1) and (2) of the Daisy Chain Act shall apply from 14 November 2024.
As a result, in the course of the 2024 resolution planning cycle, the SRB will issue the necessary instructions to the relevant national resolution authorities to repeal MREL in respect of the liquidation entities for which the SRB had previously adopted decisions setting MREL at the level equal to the loss absorption amount.
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