EBF comments on EU TLAC implementation and MREL review
Publication date: 12 June 2016
As European decision makers are discussing the way forward on TLAC implementation and the expected MREL review in Europe, the European Banking Federation would like to provide the following key principles and comments to facilitate the evolving thinking on TLAC and MREL implementation in Europe:
The implementation of loss absorbency and recapitalisation requirements in the EU should:
ensure legal certainty and provide all market participants with a stable, predictable and transparent methodology for setting loss absorbing capacity requirements sufficient to ensure the continuity of critical functions provided by banks, without recourse to public solvency support.
be consistent with the globally agreed TLAC term sheet and fully avail itself of the therein embedded different options for debt subordination that best meet European specificities and business and funding models. Any departure from the TLAC Term Sheet needs to be tested in an impact assessment to ensure the benefits outweigh the costs and that the framework is consistent with the Commission’s jobs and growth agenda.
be consistent with the resolution strategy of individual banks and striking the right balance between avoiding market fragmentation and ensuring a level playing field.
ensure conceptual and technical consistency with the existing legal framework, notably the CRR and BRRD, and retain the legal framework as simple as possible
Great to have Julius Baer onboard, the first Swiss bank and first private bank globally to join. Principles are not about any one asset class or banking business but rather are a framework for def. what it means to be a resp. bank, both globally and in every mkt. @UNEP_FI https://t.co/GtW0QWWvym
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European Banking Federation
The EBF is the voice of the European banking sector, bringing together national banking associations from 45 countries. The EBF is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere.
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