Recital 3

(3) The review carried out by the Commission found that it would be appropriate and proportionate to the objectives pursued by the rules on internal MREL to allow resolution authorities to set the internal MREL on a consolidated basis for a range of entities that is wider than the range resulting from the application of Directive 2014/59/EU and Regulation (EU) No 806/2014, where such wider range covers institutions and entities that are not resolution entities themselves, but that are subsidiaries of resolution entities and that control other subsidiaries (‘intermediate entities’) within the same resolution group. That would be in particular the case for those banking groups that are headed by a holding company. In such cases, the intermediate entities naturally centralise intragroup exposures and channel the internal MREL eligible resources pre-positioned by the resolution entity. Due to that structure, such intermediate entities could be disproportionately affected by the existing deduction rules. The Commission also concluded that the framework for the MREL would be made more proportionate by adjusting the rules on the scope of exposures that an intermediate entity is required to deduct, where those exposures are to a liquidation entity not subject to a decision determining the MREL. In those cases, it is not expected that write-down and conversion powers will need to be exercised in respect of those liquidation entities. By contrast, the remaining entities of the resolution group will need to be recapitalised by the resolution entity in the case of distress or failure. The necessary MREL eligible resources should therefore be present at all levels of the resolution group, and their availability for loss absorption and recapitalisation should be ensured through the deduction mechanism. Thus, in its review, the Commission concluded that intermediate entities should continue to deduct the full amount of their holdings of internal MREL eligible resources issued by other non-liquidation entities in the same resolution group.

← Recital 2 · All articles · Recital 4 →

Source: EUR-Lex (Cellar) · retrieved 2026-10-16 · Text as adopted (Official Journal); later amendments are not incorporated in this text.