EU banks continue to meet their MREL, still 21 banks in their transition period report a shortfall

The European Banking Authority (EBA) today published its Q2 2024 quarterly Dashboard on minimum requirement for own funds and eligible liabilities (MREL), which discloses aggregated statistical information for 339 banks earmarked for resolution across the European Union and for which EBA has received data about both decision and resources. For the first time, the Dashboard also includes the list of entities covered. All banks meet their MREL requirements in line with the Bank Recovery and Resolution Directive (BRRD) deadline of 1 January 2024, with the exception of 21 banks, still in their transition period that report a shortfall. The amount of instruments becoming ineligible over the next year for the sample reached EUR 220bn, which appears manageable.

As of 30 June 2024, 318 banks out of a sample of 339 met their MREL target while 21 are still in their transition report a shortfall - this is down from 30 as at end 2024 on a comparable sample. Furter details on the provision of transition period are provided in the latest EBA European Resolution Examination report. Their combined outstanding shortfall reached EUR6.1bn or 2.6% of their combined risk-weighted assets.

Banks in the sample reported EUR 220bn of MREL instruments that will become ineligible by the end of June 2025 due to their residual maturity falling below one year. These account for around 18.6% of MREL eligible instruments other than own funds which appears manageable.

Transfer strategies continue to be the preferred option in terms of number of decisions (61%), while bail-in is the favoured option in terms of RWAs covered (94%). This reflects the fact that transfer strategies are favoured for smaller banks, while bail-in is the preferred option for the larger ones.

More details on MREL roll over needs and the state of resolution planning will be included in the upcoming Autumn 2024 EBA Risk Assessment Report.

Note to the editors

This MREL dashboard also covers Q1in the statistical annex.

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.

Banks having completed their transition period must disclose their MREL requirement and resources, the Dashboard includes a list of these entities, a list of entities is included in the dashboard.

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.

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