The SRB publishes today its MREL dashboard for Q1.2023. The MREL dashboard presents the evolution of MREL targets and shortfalls for resolution (external MREL) and non-resolution entities (internal MREL) as well as the level and composition of resources of resolution entities in that quarter. In addition, it highlights recent developments in the cost of funding and provides an overview of gross issuances of MREL-eligible instruments in the first months of 2023. 

Key findings:

• Banks continued to make progress in building up their levels of MREL, with, on average, increased reliance on senior debt for meeting their targets.
• For resolution entities, the average MREL final target including the Combined Buffer Requirement (CBR) was equal to 27.2% of the Total Risk Exposure Amount (TREA), increasing slightly with respect to the previous quarter.
• In aggregate terms, the total MREL shortfall (including the CBR) against final targets of both resolution and non-resolution entities continued to decrease, albeit at a slower pace compared to Q4.2022, respectively amounting to EUR 20.5 bn and EUR 9.1 bn.
• Banks under the SRB’s remit issued EUR 117.7 bn of MREL-eligible instruments, which was significantly higher compared to the previous quarter, as well compared to the same period of 2020-2022.
• After spiking in mid-March following the turmoil generated by the Silicon Valley Bank (SVB) and Credit Suisse crises, funding costs tightened from May onwards, allowing banks to benefit from favourable issuance conditions. Smaller issuers also took advantage of improved market conditions to return to the market. At the end of July, funding costs were hovering close to their level ahead of the turmoil showing that market confidence is being restored.
• With the end of the transition period approaching (1st January 2024), the SRB will continue monitoring the closing of the shortfall and the MREL funding conditions.