Regulatory Alerts2016-07-18
Bank recovery and resolution – the new TLAC and MREL minimum requirements
The Deutsche Bundesbank outlines the implementation of the new European bank recovery and resolution regime, which utilizes the bail-in tool to ensure orderly resolution without taxpayer bailouts. Global systemically important banks must comply with the Total Loss-Absorbing Capacity (TLAC) standard starting in 2019, while all EU banks are subject to the Minimum Requirement for Own Funds and Eligible Liabilities (MREL) under the BRRD. These frameworks mandate sufficient loss-absorbing capacity to protect financial stability and eliminate moral hazard associated with the too-big-to-fail problem.
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