BRRD - The UK's Approach To MREL

The Bank of England ("BoE") recently published a consultation paper¹ ("Consultation"), detailing its approach to setting a minimum requirement for own funds and eligible liabilities ("MREL") to be maintained by UK banks and other covered entities pursuant to the EU's Bank Recovery and Resolution Directive ("BRRD"). The MREL requirements will apply to all UK institutions within the scope of the bail-in provisions of the Banking Act 2009, which implemented the BRRD into UK law, and the BoE's powers to set MREL for each such institution derive from its status as the national resolution authority for the UK. The Consultation remains open for comment until 11 March 2016.

Background

The BRRD was partially implemented into the laws of the UK in January 2015, pursuant to the Banking Act 2009, with the provisions on MREL taking effect from 1 January 2016. Under the BRRD, each national resolution authority is required to set the applicable level of MREL in relation to each