The European Commission has taken an important step today towards ensuring the effectiveness of so-called 'bail-in' rules for banks and, more broadly, clarifying the overall EU resolution framework. Today's proposed Delegated Regulation specifies the criteria that authorities responsible for resolving banks will need to consider when setting the minimum requirements for own funds and eligible liabilities (MREL) – or easily 'bail-inable' instruments - for the purpose of loss absorption and recapitalisation of banks. The Delegated Regulation will further clarify a key provision of the Bank Recovery and Resolution Directive (BRRD) and support the overall objective of having a robust MREL. Jonathan Hill, EU Commissioner for Financial Stability, Financial Services and Capital Markets Union, said: “It is important that banks hold enough regulatory capital and high-quality liabilities to absorb potential losses in case they have to be resolved. Today's implementing rules help ensure that. It matters because we need a well-functioning system where it's the banks' creditors, rather than tax payers, who pay for problems in banks." For the full press release see here
