What MREL is for
A resolution only works if the failing bank has enough liabilities that can lawfully and credibly absorb losses. MREL guarantees that stock exists in advance. It is set bank by bank by the resolution authority — the Single Resolution Board for significant banking union groups — as the sum of two components: a loss-absorption amount, mirroring the bank's going-concern capital requirements, and a recapitalisation amount, sized to restore compliance after resolution for the parts of the bank that would continue.
How it is expressed
Since the 2019 banking package, MREL is expressed as two parallel ratios that must both be met: a percentage of the total risk exposure amount and a percentage of the leverage ratio exposure. Requirements are decided annually within resolution planning, together with any subordination requirement — the share of MREL that must be met with own funds and subordinated instruments rather than ordinary senior debt.
What counts towards it
Own funds count in full. Eligible liabilities must meet the conditions of the CRR — among them a remaining maturity above one year, no acceleration rights and issuance out of the resolution entity — which is why banks issue dedicated layers such as senior non-preferred debt. Instruments in this database carry their seniority class precisely because that class determines where they stand in an MREL stack.
MREL and TLAC
TLAC is the FSB's equivalent standard for global systemically important banks, written directly into the CRR as a minimum requirement. For EU G-SIIs, MREL is set on top of — and at least equal to — the TLAC minimum.