On 1 April 2022, the Council of the EU published a three-column table to commence trilogues on the proposed Regulation as regards the prudential treatment of global systemically important institution groups (G-SII groups) with multiple point of entry resolution strategy and a methodology for the indirect subscription of instruments eligible for meeting the minimum requirement for own funds and eligible liabilities (MREL).
The so-called ‘Daisy Chain’ proposal introduces targeted adjustments that will play an essential role in improving an EU institution’s resolvability.
The Daisy Chain proposal amends the EU bank resolution framework by:
- Incorporating a dedicated treatment for the indirect subscription of instruments eligible for internal MREL.
- Further aligning the treatment of G-SII groups with a multiple point of entry resolution strategy with the treatment outlined in the Financial Stability Board’s total loss absorbing capacity (TLAC) standard.
- Clarifying the eligibility of instruments in the context of the internal TLAC.