Regulatory Alerts2022-09-19 | NBB_2022_21Added · Updated
Circular NBB_2022_21 of the Resolution Board on the methodology and assessment criteria for applying the specific MREL requirement for top-tier institutions to non-top-tier institutions
The Resolution Board of the National Bank of Belgium establishes a three-step methodology to determine whether the specific MREL requirement for top-tier institutions must be applied to non-top-tier institutions within resolution groups having total assets of less than EUR 100 billion. The process first assesses whether the failure of the institution would likely pose a systemic risk, then evaluates the necessity of applying the top-tier requirement based on existing MREL levels and loss-absorption thresholds, and finally reviews proportionality criteria regarding deposit dominance, market access for eligible liabilities, and reliance on Tier 1 capital. This framework ensures that the specific MREL requirement is only imposed when necessary and proportionate to the institution's specific financing structure and risk profile.