The European Banking Authority (EBA) released its second MREL impact assessment report, analyzing effects on EU banks, markets, and funding structures, with data up to 2024.
The European Banking Authority (EBA) has published its second Impact Assessment Report on the minimum requirement for own funds and eligible liabilities (MREL). The report evaluates the effects of the MREL framework on EU institutions, markets, and funding structures.
Between 2022 and 2024, EU banks continued to build MREL resources, reaching an average of 34.7% of total risk exposure amount (TREA) by the end of 2024. During this period, EUR 371 billion in MREL-eligible instruments were issued in 2024 alone.
The report indicates that the introduction of MREL requirements has led to increased issuance of eligible liabilities across banks. Larger banks issue across various subordination layers, while smaller banks rely mainly on retained earnings and CET1 capital. Own funds constitute 20.5% of TREA on average, remaining the largest MREL component.
Authorities report no material changes to banks’ business models attributable to MREL. However, smaller, deposit-funded institutions face higher compliance costs and complexity. Structural adjustments within banking groups are limited and driven more by resolvability considerations than MREL requirements alone.
The MREL framework aims to ensure that EU banks have sufficient loss-absorbing capacity to support resolution strategies in case of failure. The BRRD set 1 January 2024 as the deadline for compliance, with some exceptions for recent resolution strategy changes or extensions under Article 45m BRRD.
The EBA is mandated under Article 45l(2) of the BRRD to produce a report every three years assessing MREL’s impact. This publication is the final report under the current mandate.
