The Bank of England has published a policy statement finalising changes to its approach to setting minimum requirement for own funds and eligible liabilities (MREL) and preferred resolution strategies, incorporating feedback from its October 2024 consultation. The revised MREL Statement of Policy will apply from 1 January 2026, with the Bank moving to a single implementation date for all changes. The final package increases the indicative total assets range used in strategy-setting to GBP 25 billion–GBP 40 billion (on a three-year forward-looking basis), and commits to updating the thresholds every three years from 2028 if needed to reflect nominal economic growth. Transfer firms are expected to have MREL set equal to their minimum capital requirement (MCR), meaning MREL imposes no additional loss-absorbing capacity requirement and the indicative transactional accounts threshold will no longer result in MREL, while bail-in firms can generally expect end-state MREL of two times MCR (or international total loss-absorbing capacity minima if higher) with the existing glide path and an clarified ability to seek an up to two-year add-on in exceptional cases. The Bank also narrowed and clarified requirements on contractual triggers for internal MREL instruments, introduced a more proportionate “repeat issuance” approach to independent eligibility legal opinions for eligible liabilities instruments, confirmed eligible liabilities should be measured on an accounting-value basis, and replaced pre-approval for material changes in the form of internal MREL with a 15-day advance notification expectation. Alongside the policy statement, the Prudential Regulation Authority has launched consultations on amendments to MREL reporting and MREL-related disclosure, and the Bank confirmed its intention to consult on changes to COREP13 reporting that could remove four templates. The Bank also expects associated legislative changes enabling the revised framework, including revocation of UK Capital Requirements Regulation total loss-absorbing capacity provisions and the MREL UK Technical Standards, to take effect on 1 January 2026.
Bank of England 2025-07-15
Bank of England finalises revised MREL policy raising total asset thresholds to GBP 25 billion–GBP 40 billion and setting transfer-firm MREL at minimum capital requirement
The Bank of England has finalized changes to its approach for setting minimum requirements for own funds and eligible liabilities (MREL) and preferred resolution strategies, effective 1 January 2026. Key updates include an increased indicative total assets range for strategy-setting and clarified requirements for internal MREL instruments. The Prudential Regulation Authority has initiated consultations on MREL reporting amendments, with legislative changes expected to align with the revised framework by 2026.