The Bank first published its Bank’s MREL Statement of Policy in 2016, updating it in 2018 to reflect the Bank’s approach to the intragroup distribution of MREL resources. The Bank reaffirmed in June 2018 that it would review the calibration of MREL and the final compliance date, prior to setting end-state MRELs, having particular regard to any intervening changes in the UK regulatory framework as well as the experience of UK firms in issuing liabilities to meet their interim MRELs. Having completed an initial analysis of firms’ access to the market for MREL-eligible instruments, the Bank has decided to issue this DP as the first part of the MREL Review. Given the experience of mid-tier banks (as defined in the DP) of issuing MREL-eligible instruments, the focus of the DP is on these banks. The DP will gather feedback and ideas from stakeholders to inform the Bank’s thinking on the policy choices that it will consult on in the second part of the Review, which it will complete in 2021.
The Bank’s MREL Review will consider the resolution strategy thresholds, the calibration of MREL, instrument eligibility, and the application of MRELs within banking groups. The Bank intends to publish a Consultation Paper in summer 2021, setting out any proposed changes to its MREL framework. The Bank intends to make any policy changes by the end of 2021, in light of feedback received on the Bank’s Consultation Paper.