Proportionality of MREL for Transfer Strategies in the Context of the CMDI. Initial Considerations
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Even in light of the proposal to strengthen the common framework for bank crisis management and national deposit guarantee schemes (CMDI), MREL (minimum requirement for own funds and eligible liabilities) in the context of bank crisis resolution continues to be a key tool. However, it seems clear that the rules determining MREL calibration may require revision if transfer strategies, which seem more suitable for resolving medium and small banks, are to play a greater role. The CMDI Proposal does not seem to fully develop such a revision. This raises concerns that we may miss a good opportunity to enable market-based resolution tools that are less burdensome for taxpayers.
Note
A preliminary version of this paper was presented at the International Workshop ‘Proportionality in Bank Crises: The Case of Retail Banks’, Siena 17–18 October 2024 – Certosa di Pontignano. The paper presented here attempts to maintain the dialogical tone used on that occasion.
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Articles in the same Issue
- Frontmatter
- Frontmatter
- Introduction
- Early Intervention Measures and Shareholders’ Rights
- Early Intervention Measures (EIMs): The EU Framework in Force and Its Proposed Amendment
- Proportionality in Crisis Prevention and Resolution Planning: Institutional Protection Schemes and Banking Groups. Some Preliminary Considerations
- Proportionality of MREL for Transfer Strategies in the Context of the CMDI. Initial Considerations
- Deposit Guarantee Schemes: The Key Tool for Avoiding a Disorderly Exit from the Market for Small and Medium-Sized Banks in Difficulty
- Deposit Guarantee Schemes and Bank Crises: Some Considerations on Proportionality
- EU Regulatory Proposal on the Treatment of Liabilities of Uncertain Existence, Timing or Amount in a Bail-In Scenario
Articles in the same Issue
- Frontmatter
- Frontmatter
- Introduction
- Early Intervention Measures and Shareholders’ Rights
- Early Intervention Measures (EIMs): The EU Framework in Force and Its Proposed Amendment
- Proportionality in Crisis Prevention and Resolution Planning: Institutional Protection Schemes and Banking Groups. Some Preliminary Considerations
- Proportionality of MREL for Transfer Strategies in the Context of the CMDI. Initial Considerations
- Deposit Guarantee Schemes: The Key Tool for Avoiding a Disorderly Exit from the Market for Small and Medium-Sized Banks in Difficulty
- Deposit Guarantee Schemes and Bank Crises: Some Considerations on Proportionality
- EU Regulatory Proposal on the Treatment of Liabilities of Uncertain Existence, Timing or Amount in a Bail-In Scenario
