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The SRB publishes today its MREL dashboard for Q3.2023. 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 the quarter. In addition, it highlights recent developments in the cost of funding and provides an overview of gross issuances of MREL-eligible instruments.
Key findings:
For resolution entities, the average MREL final target including the Combined Buffer Requirement (CBR) was equal to 27.3% of the Total Risk Exposure Amount (TREA), unchanged from Q2.2023.
Banks continued to make progress in building up their levels of MREL. In aggregate terms, the total MREL shortfall (including the CBR) against final targets of resolution entities decreased to EUR 8.9 bn (corresponding to 0.1% TREA). 11 out of 14 banks in shortfall against their final targets (including the CBR) have a longer transitional period to meet their final targets.
For non-resolution entities, the overall MREL shortfall against final targets (including the CBR) also reduced over the reporting quarter, amounting to EUR 6.6 bn (corresponding to 0.3% TREA).
Banks under the SRB remit overall issued EUR 63.3 bn of MREL-eligible instruments, above the levels reported for the same period of 2020-2021, but below Q3.2022.
MREL-eligible bonds continued to attract investors and funding costs continued their descending trend throughout the final months of 2023. After staying at very low levels in late 2023, volatility started rising up at the beginning of 2024, due to the dominance of risk-off sentiment that reverberated negatively on European credit spreads.