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Banking fragility rooted in justice failures Evidence from Ukraine
CEPS Project

Total Assets’ versus ‘Risk Weighted Assets’: does it matter for MREL requirements?

Unit Involved

Financial Markets and Institutions

01 May 2016 / 30 July 2016

The Bank Recovery and Resolution Directive (BRRD) foresees a minimum requirement for eligible liabilities and own funds (MREL) that banks need to comply with, to ensure the effectiveness of the bail-in tool. In the context of a discussion is on how MREL should be constructed in practice, this paper looked at alternative ways to compute the requirements, showing how the choice of the benchmark metric (between Risk Weighted Assets, Total Assets or Leverage Exposure) can change the allocation of requirements across banks. It also reviewed MREL in light of the global effort to ensure future resolvability of banks, highlighting some differences and inconsistencies with the FSB’s Total Loss-Absorption Capacity (TLAC) measure.

CEPS Project

Project Details

Financial Markets and Institutions


Total Assets’ versus ‘Risk Weighted Assets’: does it matter for MREL requirements?

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European Parliament, DG for Internal Policies of the Union

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Willem Pieter De Groen Willem Pieter De Groen
Willem Pieter De Groen
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