Banco Bilbao Vizcaya Argentaria SA: BBVA complies with its new requirement for own funds and eligible liabilities (MREL)
BBVA complies with its new requirement for own funds and eligible liabilities (MREL).
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MREL does not apply to
In addition, the CRU also establishes a subordination requirement, under which institutions must meet part of their MREL requirement with a minimum percentage of subordinated instruments, such as regulatory capital, subordinated debt or senior bonds. not privileged. In the case of BBVA, from
Given the current capital structure and eligible liabilities of its resolution group, BBVA already complies with the aforementioned MREL requirement, as well as the new subordination requirement.
BBVA currently holds approximately 90 percent of the instruments eligible for MREL purposes with a degree of subordination equal to or greater than that of senior non-preferred debt, demonstrating its high loss absorbing capacity.
Following the sale of BBVA
What is MREL?
The purpose of MREL is to ensure that European banks have their own funds and eligible liabilities to absorb any losses in the event that the supervisor deems them to be in default.
The Bank Recovery and Resolution Directive (BRRD) created this requirement to ensure that troubled institutions hold sufficient equity and eligible liabilities to, first, absorb any losses and, second, recapitalize. without resorting to public funds. Thus, the purpose of this cushion of own funds and eligible liabilities is to prevent taxpayers from footing the bill for a possible bank bailout.
How is MREL determined?
The MREL requirement is determined for each individual bank separately, taking into account capital requirements and other factors such as the corporate structure of each institution and its strategy in the event of resolution.
In the case of BBVA, given its MPE (“ Multiple Point of Entry ”) resolution strategy, the MREL requirement does not apply
-1 Since the reference date used in the MREL calculations was