MREL determination

On 16 October 2018 the Appeal Panel rendered its decision on a case in which a decision taken by the Single Resolution Board (hereinafter, “the Board”) on the determination of the minimum requirement for own funds and eligible liabilities (hereinafter, “MREL”) at consolidated level for a banking group has been contested.

In the case at hand, the Appeal Panel noted that the adopted resolution strategy is in compliance with the applicable regulations and proportionate considering the Relevant Credit Institution’s relative size, business model, funding model and risk profile. Based on the facts on the concrete case, the Appeal Panel also noted that the MREL determination is, by its very nature, a dynamic exercise in which the Board disposes of a margin of technical discretion. This allows the Board to adjust its MREL determination over time to all relevant changes in factual assumptions, if any, adhering to the principle of proportionality.

The Appeal Panel ruled that the MREL calibration adopted by the Board in the concrete case showed no manifest error, thus the Appeal Panel decided to reject the appeal in all admissible pleas which were upheld.

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