The Bank of England’s approach to setting a minimum requirement for own funds and eligible liabilities (MREL)

28 March 2024: The Bank, as Resolution Authority, has published 2024 external MRELs for all firms with a resolution entity incorporated in the UK for which an MREL above minimum capital requirements has been communicated.

18 April 2023: MREL for firms with a partial transfer preferred resolution strategy

Paragraph 4.8 of the statement of policy states that ‘where an institution meets the necessary conditions for a partial transfer resolution strategy to be appropriate, its external MREL will be set taking this into account’. 

For firms subject to a partial transfer preferred resolution strategy, the Bank may choose to adjust a firm’s MREL downwards from the full amount that would be required for a bail-in resolution strategy. This is a firm-specific judgement balancing a number of factors. The quantum of MREL may be adjusted to reflect the fact that, in a partial transfer resolution, less than the entire balance sheet of the institution may need to be recapitalised at the point of resolution. The Bank’s judgment as to the firm-specific adjustment required may change over time, for example in response to a change to a firm’s preferred resolution strategy, or the size and composition of its balance sheet.

The Bank has reflected adjustments made to the binding interim MREL for firms with a partial transfer preferred resolution strategy, under paragraph 4.8, in its latest publication of UK-headquartered firms’ MRELs. The Bank has also updated the format of the disclosure to reflect the fact that as of 1 January 2023 most firms have reached their end-state MRELs and that, in future, firms which become newly subject to a preferred resolution strategy involving the use of stabilisation powers will be subject to the transition arrangements set out in the statement of policy (as updated in 2021). 

Institutions and groups should notify the Bank if they forecast, at any point in time, that their total assets will exceed £15 billion and/or 40,000 – 80,000 transactional accounts in the following three years. This is set out in paragraphs 9.7 and 9.10 of the statement of policy. In case of questions, please speak to your usual supervisory or resolution authority contact, or email resolution.enquiries@bankofengland.co.uk.

Applications for a flexible add-on should be sent by institutions to resolution.enquiries@bankofengland.co.uk, copying in their usual Resolution Directorate contact. The application should set out what extension the institution is seeking and provide supporting evidence to justify the application. Institutions should prepare their request taking into account this Statement of Policy and, in particular, paragraph 9.9.

Published 13 June 2018. Superseded on 01 January 2022 by December 2021 version.

• The Bank of England’s approach to setting a minimum requirement for own funds and eligible liabilities (MREL) – Statement of Policy June 2018 (pdf)

Following ‘Policy Statement - Responses to Consultation on the Bank of England’s approach to setting MREL within groups, and further issues’

---

 

Published on 8 November 2016. Superseded by June 2018 version.

• The Bank of England’s approach to setting a minimum requirement for own funds and eligible liabilities (MREL) – Statement of Policy November 2016 (pdf)

- Following ‘The Bank of England’s review of its approach to setting a minimum requirement for own funds and eligible liabilities (MREL) – Policy Statement November 2016’

First Publication of Statement of Policy.