The European Banking Authority (EBA) published its second impact assessment of the minimum requirement for own funds and eligible liabilities (MREL), concluding that EU banks continued to build MREL resources and expand market access with limited observable impact on business models, while structural challenges persist for smaller institutions. Between 2022 and 2024, resolution entities increased MREL resources to meet final targets applicable from 1 January 2024. By end-2024, MREL-eligible instruments averaged 34.7% of total risk exposure amount (TREA), with own funds the largest component at 20.5% of TREA and eligible debt at 13.6%; subordinated instruments reached 27.8% of TREA. Issuance of MREL-eligible instruments totalled EUR 371 billion in 2024 across 105 issuing banks, with senior non-preferred debt becoming the dominant eligible debt instrument; larger banks issued across subordination layers, while smaller banks relied more on retained earnings and Common Equity Tier 1 capital. Authorities reported no material MREL-driven changes in banks’ business models or group structures, but highlighted higher compliance costs and complexity for smaller, deposit-funded banks. The report is delivered under the EBA’s three-year mandate in Article 45l(2) of the Bank Recovery and Resolution Directive and is described as the final iteration under the current mandate. Alongside this monitoring work, the EBA is considering ways to streamline the capital and TLAC/MREL framework as part of implementing recommendations from its report on the efficiency of the regulatory and supervisory framework.

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