06 November 2024

SRB Bi-annual reporting note to Eurogroup – November 2024

This note is aimed at reporting to the Eurogroup of 4 November 2024 on: Progress on resolvability in the Banking Union; Implementation of the Vision 2028 Strategy; Important legislative files; Liquidity in resolution and Recent litigation cases.

Progress on resolvability in the Banking Union

All entities under direct SRB remit – the significant institutions - with external and internal targets
which had to comply with their final MREL targets as of 1 January 2024 met their requirements.
This is also true for less-significant institutions, under the direct remit of National Resolution Authorities
(NRAs) that are earmarked for resolution and, thus, have been assigned an MREL target.
The MREL shortfall for significant institutions at Q2.2024 (the most recently available datapoint)
amounted to EUR 3.7 bn (corresponding to 0.05% of total risk weighted assets) down from EUR
4.5bn of Q1.2024. The shortfall is attributed solely to banks with transitional periods going beyond 1
January 20241.

b. Progress in other resolvability dimensions
The large banks in the Union, the so-called significant institutions, are steadily advancing in all
resolvability dimensions, thus building capabilities that can also help in increasing their resilience–
through, for instance, funding diversification, better governance and data management.
The 2023 resolvability assessment report for significant institutions showed that banks had made
substantial progress on the resolvability conditions prioritised since 2021, mainly related to the execution
of the bail-in tool. In the meantime, the SRB prioritised work on capabilities related to liquidity in resolution,
MIS, separability and restructuring. In particular, banks have worked in a timely manner on the estimation
of liquidity needs in resolution and identification of sources of collateral, the generation of the valuation
dataset and preparation for a sale of business and a restructuring post bail-in. Also in 2024, the preliminary
results show further improvement in each of these areas, as the SRB has continued to monitor that banks
are closing the remaining gaps on the Expectations for Banks, and asked banks to increase the testing,
notably in the areas of bail-in execution, liquidity and MIS for valuation.

The SRB published its second less-significant institutions’ (LSIs) report. The report examines key
developments in the sector, details the NRAs’ resolution planning and crisis management activities in 2023-
2024, and explains the SRB’s role in LSI oversight in the Banking Union. It focuses on the 2023 resolution
planning cycle (RPC), and progress made by LSIs in terms of meeting their MREL requirements and
building up their resolvability capabilities. NRAs continue to phase in and proportionately implement the
SRB’s Expectations for Banks, including its resolvability assessment (heatmap) approach. At this stage,
LSIs show good progress on the resolvability capabilities prioritised by their respective NRAs in
2022-2023.

SRB

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