The Bank first published its MREL Statement of Policy (SoP) in 2016, updating it in June 2018 to reflect the Bank’s approach to the intragroup distribution of MREL resources. The Bank reaffirmed in June 2018 that it would review the calibration of MREL and the final compliance date, prior to setting end-state MRELs, having particular regard to any intervening changes in the UK regulatory framework as well as the experience of UK firms in issuing liabilities to meet their interim MRELs.
The CP is the second stage of the MREL Review and sets out the Bank’s proposed changes to its MREL framework. It follows on from the first stage of the MREL Review, where the Bank issued a Discussion Paper (DP) in December 2020. The feedback and ideas gathered from stakeholders have informed the Bank’s thinking on the proposals presented in the CP.
The Bank’s MREL Review considers the resolution strategy thresholds, the calibration of MREL, instrument eligibility, and the application of MRELs within banking groups. The Bank intends to make any policy changes by the end of 2021, taking into account feedback received on the Bank’s Consultation Paper.