UK Resolution Authority Consults on Amendments to Approach for Setting MREL

The Bank of England has published a consultation paper on amendments to its statement of policy on setting the minimum requirement for own funds and eligible liabilities. The proposals are designed to ensure that the U.K.'s MREL framework: (i) is simplified and consolidated where possible, to make it easier to navigate and implement; (ii) keeps up to date with, and is responsive to, wider developments in financial regulation and markets; (iii) remains aligned with international standards; and (iv) adapts over time to reflect lessons learnt from its implementation.

The proposals are grouped around three themes:

• Restating, with modifications, certain U.K. Capital Requirements Regulation total loss absorbing capacity provisions in the MREL statement of policy and other related changes.
• Updates to the BoE's indicative thresholds for setting a stabilization power preferred resolution strategy.
• Revisions to reflect findings from the second assessment of the BoE's Resolvability Assessment Framework for major U.K. firms, published on August 6, 2024, and other lessons from policy implementation.

Annex 2 to the consultation contains the revised text of the statement of policy. The deadline for comments is January 15, 2025. The BoE anticipates finalizing its response to the consultation in H1 2025. Subject to the outcome of the consultation, the BoE expects the majority of the changes will apply from January 1, 2026, aside from certain minor changes that may apply earlier (but no earlier than July 2025).

Return to main website.