Recital 8

(8) Under the current framework, for entities earmarked for liquidation, the MREL is set, in the majority of cases, at the amount necessary for loss absorption, which corresponds to the own funds requirements. In such cases, the MREL does not entail any additional requirement directly related to the resolution framework for the liquidation entity. That means that a liquidation entity can fully comply with the MREL by complying with the own funds requirements and that a dedicated decision of the resolution authority determining the MREL does not contribute in a meaningful way to the resolvability of that entity. Such a decision entails many procedural obligations for the resolution authority and for the liquidation entity without a corresponding benefit in terms of improved resolvability. For that reason, resolution authorities should not determine the MREL for liquidation entities. The framework for the MREL should be applied on the basis of criteria that ensure that an entity qualifies as a liquidation entity consistently across the Union. Resolution authorities should therefore ensure a consistent application of the new provisions concerning liquidation entities to those entities that are part of a cross-border group, in particular where the group comprises entities located inside and outside the banking union.

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