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Parliamentary questions
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17 February 2016
P-001359-16
Question for written answer P-001359-16
to the Commission
Rule 130
Jakob von Weizsäcker (S&D)

 Subject:  Minimum requirement for own funds and eligible liabilities (MREL)
 Answer in writing 

Article 37(10)(a) of the Bank Recovery and Resolution Directive (BRRD) requires ‘a contribution to loss absorption and recapitalisation equal to an amount not less than 8% of total liabilities including own funds of the institution under resolution’ before ‘[i]n the very extraordinary situation of a systemic crisis, the resolution authority may seek funding from alternative financing sources through the use of government stabilisation tools’.

1. Bearing in mind that the determination of the specific level of MREL is to be set by the Resolution Authority and in light of European Banking Authority opinion EBA/Op/2016/02, is it the Commission’s understanding that the MREL for the institutions potentially subject to resolution to be held at all times must be at least 8% of total liabilities to safeguard taxpayers, if it is found that the bank cannot be liquidated under normal insolvency proceedings?

2. How likely does the Commission deem the availability of bail-inable, but non-MREL eligible instruments at the actual moment of bail-in, especially with regard to non-covered deposits and the potential for ‘smart money’ to leave the bank ahead of a potential resolution?

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