On Monday 22 January, the Single Resolution Board (SRB), the European authority responsible for resolving major bank failures within the euro area banking union, opened a public consultation aimed at reflecting on the future of the policy on MREL assets that can be transferred in the event of a bank resolution.
The aim is to take account of the failures that took place in spring 2023 in Switzerland and the United States, such as that of Silicon Valley Bank (see EUROPE 13146/13), which highlighted the importance of the liquidity available when a bank is in difficulty.
For the SRB, it is becoming essential for a bank to be able to deploy several resolution options in parallel, focusing on resolution tools such as the sale of certain business segments or the creation of ‘bridge institution tools’, even for large banking groups. This type of instrument is very relevant when a default is due more to a liquidity rather than solvency, stresses the European authority.
See the consultation document: https://aeur.eu/f/ai9 (Original version in French by Mathieu Bion)