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MREL

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Pursuant to the provisions of the Act on Resolution, in conformity with the Bank Recovery and Resolution Directive (BRRD) of the European Union, domestic credit institutions and investment firms are obliged to continuously comply with the minimum requirement for own funds and eligible liabilities (MREL). The MREL requires the institutions to hold funds of adequate quantity and quality that can be written off partly or completely or transformed into capital in the case of a crisis situation, thus ensuring the bearing of losses by owners and creditors as well as the continuous performance of the institutions’ critical functions during and following the crisis situation. The degree of the MREL requirement for the institutions and groups of institutions headquartered in Hungary is determined by the Magyar Nemzeti Bank as resolution authority, while in the case of cross-border institutions – as a main rule – the MREL requirements at consolidated and individual levels are determined by the resolution authorities concerned, within the framework of their cooperation in resolution colleges.

 

The MNB’s principles concerning the imposing of the MREL requirement formulated within the framework of the prevailing legislation:

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