The Single Resolution Board (SRB), in published remarks for the Vienna Initiative’s MREL workshop in Vienna, stressed that developing markets for the minimum requirement for own funds and eligible liabilities (MREL) must go hand in hand with practical crisis preparedness. Banks under its remit issued an annual average of EUR 296 billion in eligible instruments between 2021 and 2025, but access to such funding remains challenging in Central, Eastern and Southeastern Europe.
Shallow markets and a limited institutional investor base can raise issuance costs, particularly for smaller banks. Subsidiaries operating under a multiple point of entry resolution strategy must issue external debt locally because failures are managed at subsidiary rather than parent level. These constraints have led banks to sell debt directly to retail customers, exposing their savings to potential losses in a crisis. The European Bank for Reconstruction and Development has supported local currency bond issuance, including in Western Balkan countries aligning their frameworks with EU rules.
Beyond funding, banks need reliable liability and valuation data and operational playbooks for executing bail-in. Under the Single Resolution Mechanism’s Vision 2028 strategy, launched in 2024, the focus has shifted from building capabilities to testing whether they work in practice. Authorities also need simulations that test resolution tools and coordination across jurisdictions. Consistent with its recent Eurogroup reporting on simplifying the banking framework, the SRB identified the European Commission’s forthcoming banking package as an opportunity to consider MREL simplification without weakening the resilience already built.