On 4 July 2018, HM Treasury published a letter from the Economic Secretary to the Treasury, John Glen MP, dated 28 June 2018 to the chair of the European Scrutiny Committee, Sir William Cash MP. The letter provides an update on the proposed amendments to the Bank Recovery and Resolution Directive (BRRD), the Capital Requirements Directive IV (CRD IV) and the Capital Requirements Regulation (CRR) following a general approach that was agreed at the May ECOFIN meeting.

The letter outlines the outcome reached with regards to the following issues:

  • the quantity of the EU’s minimum requirement for own funds and eligible liabilities (MREL);
  • the quality of MREL;
  • MREL subordination;
  • MREL eligibility criteria;
  • MREL timings;
  • the fundamental review of the trading book; and
  • the way global systemically important institutions (G-SIIs) are designated.

In terms of MREL timings, the letter states that firms will need to comply with full MREL requirements by 1 January 2024, with resolution authority discretion to extend on a case by case basis. It also states that the UK was successful in securing agreement that G-SIIs and top-tier firms shall be required to meet minimum MREL requirements by 1 January 2022, in line with the total loss absorbency capacity standard.