Interim and end-state minimum requirements for own funds and eligible liabilities (MRELs)

The Bank of England has published UK-headquartered firms’ MRELs.

Overview

For resolution plans to be feasible and credible, UK firms are required to maintain sufficient resources that can absorb losses and provide for recapitalisation in resolution. To achieve this, the Bank of England, as the UK’s resolution authority, requires all banks, building societies and certain investment firms to maintain a minimum requirement for own funds and eligible liabilities (MREL).

This publication contains interim external MRELs (where relevant) and end-state external MRELs for all firms with a resolution entity incorporated in the UK for which an MREL has been communicated above minimum capital requirements.

Interim and end-state minimum requirements for own funds and eligible liabilities (MRELs)

What is MREL? 

The firms in this publication have resolution strategies which involve bail-in or partial transfer, and so must maintain sufficient equity and debt resources that can absorb losses and provide for recapitalisation in resolution.

MREL is the minimum amount of equity and subordinated debt a firm must maintain to support an effective resolution. This is separate to the capital requirements set by the PRA.

For debt or equity to count to MREL, it must meet specific conditions. These conditions ensure we could depend on that equity and debt to support a resolution.

MREL ensures that investors and shareholders – and not the taxpayer – absorb losses when a firm fails. We set MREL to reflect how we would expect to resolve a firm if they failed. The biggest and/or most complex firms have the highest MRELs – reflecting that they would be more disruptive if they failed in a disorderly way.

The Bank of England has published a Statement of Policy setting out its approach to setting MREL.

  • 28 January 2021: The Bank published for the first time firm-specific interim and end-state MREL disclosures for all UK-headquartered firms with an MREL above minimum capital requirements. Previously, the Bank published individual MRELs only for global and domestic systemically important banks and building societies headquartered in the UK.
This page was last updated 20 December 2021

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