EBA MREL Impact Assessment 2024: What the Findings Mean for Your Reporting

ByOfficer

Last updated: March 2026

If your MREL reporting has settled into a routine since the 1 January 2024 binding target deadline, the EBA just gave you a reason to reopen the file. On 24 March 2026, the EBA published its second Impact Assessment Report on the Minimum Requirement for Own Funds and Eligible Liabilities (MREL), mandated under Article 45l(2) of the Bank Recovery and Resolution Directive (BRRD). The headline number is 34.7% of Total Risk Exposure Amount (TREA) in average MREL-eligible resources across EU resolution entities by end-2024. That number matters less as an industry statistic and more as a benchmark you can hold against your own templates.

This article breaks down what the assessment found, what it means for your M-series reporting templates and Pillar 3 disclosures, and what practical steps you should take in the coming quarters.

Related reading: MREL Reporting Requirements – Templates, Frequency, and What Your Resolution Authority Expects

What the Second Impact Assessment Covers

The EBA is required under Article 45l(2) BRRD to report to the European Commission every three years on MREL’s effects on EU institutions, markets, and funding structures. The first assessment established the baseline. This second report covers the period through end-2024, capturing the first year after the binding MREL targets took effect.

The data draws from multiple sources: MREL/TLAC reporting templates (the M-series), FINREP data, market data sources, and a qualitative survey of EU competent and resolution authorities. The EBA describes this as the final iteration under the current mandate, which means the next reporting cycle may operate under revised terms depending on ongoing framework simplification discussions.

For reporting teams, the assessment is not just a policy document. It is an indirect audit of how your reported data looks relative to the EU average. If your MREL ratio sits significantly below 34.7% TREA, expect questions from your resolution authority sooner rather than later.

The Headline Numbers and What They Mean

34.7% TREA – The Average MREL Ratio

By end-2024, EU resolution entities held MREL-eligible instruments amounting to 34.7% of TREA on average. To put this in context, your own MREL ratio as reported in template M 01.00 (Key Metrics for MREL and TLAC, known as KM2) appears in row 0300: own funds and eligible liabilities as a percentage of TREA. If you pull your most recent M 01.00 submission and compare your figure against 34.7%, you know immediately where you stand relative to the EU average.

This 34.7% includes own funds, which account for 20.5% of TREA on average, plus eligible liabilities making up the remainder. The own funds component is large because many banks, particularly smaller ones, meet their MREL requirements primarily through retained earnings and CET1 capital rather than through dedicated issuance of eligible liabilities instruments.

EUR 371 Billion in MREL-Eligible Issuance in 2024

EU banks issued EUR 371 billion in MREL-eligible instruments during 2024. This confirms that the framework has generated real, sustained issuance activity across the sector. The volume is significant because it feeds directly into what you report in template M 02.00 (MREL and TLAC Capacity and Composition, known as TLAC1) and the funding structure breakdown in template M 04.00 (LIAB-MREL).

If your institution issued eligible liabilities in 2024, the classification of those instruments in your M 02.00 template should be consistent with how the EBA categorises them in this assessment. Senior non-preferred (SNP) instruments have become the dominant form, which means your rows for eligible liabilities subordinated to excluded liabilities (row 0090 in M 02.00) should reflect this market trend.

Senior Non-Preferred as the Dominant Instrument

The report confirms what most reporting teams already see in their own data: SNP bonds are the primary vehicle for MREL compliance among larger banks. Larger institutions issue across multiple subordination layers. Smaller banks rely on CET1 and retained earnings. This split has reporting implications.

If your institution uses SNP instruments, they appear in the M 04.00 template under row 0600 (Senior non-preferred liabilities with residual maturity of one year or more), with maturity breakdowns in rows 0610 and 0620. The maturity profile matters because instruments with less than one year residual maturity cease to count toward MREL eligibility, and the EBA’s assessment suggests that monitoring maturity runoff is becoming a sharper focus for authorities.

What 34.7% TREA Means for Your MREL Ratio Calculation

Your MREL ratio is not a single number. It decomposes into several layers that map directly to the M-series templates. Understanding how the 34.7% breaks down helps you benchmark each layer.

The Own Funds Component

Own funds account for an average of 20.5% of TREA in the EU sample. This figure comes from CET1, AT1, and Tier 2 capital reported in your COREP own funds templates (C 01.00) and then mapped into the M 01.00 key metrics template. If your own funds component is significantly higher than 20.5% TREA, you are likely meeting MREL primarily through capital rather than through dedicated eligible liabilities issuance. That is not wrong, but it means your MREL position is tied to your capital planning in ways that larger issuers have diversified away from.

In practice, I find that banks with MREL ratios dominated by own funds face a particular challenge: any reduction in CET1 (from losses, dividend distributions, or RWA increases) immediately erodes MREL headroom. Banks with a more balanced mix of own funds and eligible liabilities have a buffer against capital volatility.

The Eligible Liabilities Component

The remaining approximately 14.2% TREA (the difference between 34.7% total and 20.5% own funds) comes from eligible liabilities. These are the instruments reported in templates M 02.00 and M 04.00: senior non-preferred debt, subordinated debt not qualifying as own funds, structured notes, and other eligible liabilities meeting the requirements of Articles 72a to 72d of the CRR and Article 45b of the BRRD.

The composition matters because subordination requirements differ by resolution strategy. Banks using a bail-in resolution strategy typically need a minimum subordination component. The M 02.00 template breaks this out explicitly: row 0090 for subordinated eligible liabilities, row 0130 for Tier 2 instruments with residual maturity of at least one year that no longer qualify as Tier 2 items, and rows 0140 and 0150 for non-subordinated eligible liabilities. The 3.5% cap under Article 72b(3) CRR is applied in rows 0170 and 0180 of the same template.

MREL Data in Your Reporting Templates

The EBA’s assessment draws on the same data you submit quarterly. Here is where the report’s findings map to your templates and where discrepancies could surface.

Template M 01.00 – Key Metrics (KM2)

This is the summary template. It reports your MREL and TLAC ratios as percentages of TREA (row 0300) and the leverage ratio total exposure measure (row 0320). The 34.7% TREA figure from the EBA assessment corresponds to row 0300, column 0010 (MREL). If your figure here is substantially below the EU average, your resolution authority may increase scrutiny of your issuance plan and funding structure.

Template M 02.00 – Capacity and Composition (TLAC1)

This is where the detail lives. M 02.00 breaks down your own funds and eligible liabilities by subordination layer, grandfathering status, and deduction items. The EBA’s finding that SNP instruments dominate means that for most larger banks, the bulk of eligible liabilities should appear in the subordinated rows. If your institution has a large proportion of non-subordinated eligible liabilities (rows 0130-0150), the report’s emphasis on the subordination exemptions under Article 72b(3) and (4) CRR is directly relevant.

The prior permission rows are also worth checking. M 02.00 includes rows for unused prior permission amounts: row 0132 deducts own eligible liabilities instruments subordinated to excluded liabilities, and row 0135 breaks out the unused prior permission portion. Parallel rows 0162 and 0165 cover the non-subordinated side. If you have obtained prior permission under Article 78a CRR to buy back eligible liabilities instruments, these rows must reflect the unused portion correctly.

Template M 04.00 – Funding Structure (LIAB-MREL)

M 04.00 provides the maturity breakdown of your eligible liabilities by instrument type. The EBA report highlights that maturity management is becoming a focus area. Instruments maturing within one year drop out of MREL eligibility. Your rows 0210/0310/0410/0510/0610/0710 (the “residual maturity between 1 and 2 years” sub-rows) are the early warning line. If a significant portion of your eligible liabilities falls into this maturity bucket, your MREL ratio will decline mechanically as those instruments approach maturity unless you replace them through new issuance.

Pillar 3 Disclosure Implications

The MREL data in your regulatory reporting feeds into your Pillar 3 disclosures, specifically the EU KM2 table (Key Metrics for MREL and TLAC). The mapping between M 01.00 and EU KM2 is well defined: row 0200 of M 01.00 maps to row 1 of EU KM2 (own funds and eligible liabilities), and row 0300 maps to row 3 (the percentage of TREA).

The EBA’s 34.7% TREA figure creates a public benchmark. Analysts and market participants reading your Pillar 3 report will compare your disclosed KM2 figures against this number. If you are below the average, your Pillar 3 narrative should explain why, whether due to resolution strategy, group structure, or planned issuance. Silence on a below-average MREL ratio will draw questions.

The assessment also highlights the subordination composition. Your EU TLAC1 disclosure table (mapping from M 02.00) shows the split between subordinated and non-subordinated eligible liabilities. The market now has a clearer picture of what “normal” looks like. In my experience, the Pillar 3 narrative section around MREL is often underdeveloped. This report gives you a reason to strengthen it.

The Smaller Bank Challenge

The report’s most operationally significant finding is that structural challenges persist for smaller banks. Larger banks issue SNP bonds, AT1, and Tier 2 across multiple markets. Smaller banks lack wholesale market access and rely on CET1 to meet MREL. This is not a reporting error. It is a structural reality. But it creates reporting consequences.

Smaller institutions that meet MREL primarily through own funds have simpler M 02.00 and M 04.00 templates (fewer instrument types, no complex subordination layers) but a more fragile MREL position. Any capital event that reduces CET1 directly reduces the MREL ratio. If you work at a smaller bank, the practical action from this assessment is to stress-test your MREL ratio under capital reduction scenarios and document the results for your resolution authority.

The EBA notes that the MREL framework has encouraged smaller banks to develop market access. If your institution has begun issuing eligible liabilities for the first time, make sure the instrument classification in your M 02.00 template is correct. Misclassifying a senior unsecured bond as a senior non-preferred instrument (or vice versa) will cause validation errors and invite supervisory questions.

What Changed and What Is Coming

The assessment is described as the final iteration under the current Article 45l(2) BRRD mandate. Alongside the impact assessment, the EBA is working on recommendations to streamline the capital and TLAC/MREL framework, building on its Report on the Efficiency of the Regulatory and Supervisory Framework. Any simplification could affect the M-series templates in future reporting cycles.

For now, the reporting framework remains stable. But if you are planning IT system changes or template updates, factor in the possibility that M-series templates could be revised within the next two to three years as part of broader framework simplification.

The assessment also draws on FINREP data, which means the EBA is cross-referencing MREL positions against balance sheet data. If there are inconsistencies between your FINREP submissions and your M-series data (for example, eligible liabilities amounts that do not reconcile with the corresponding FINREP liability categories), expect data quality queries.

Practical Actions for Your Team

Based on the assessment’s findings, here is what I would check in the coming weeks.

Benchmark Your M 01.00 Against 34.7% TREA

Pull your latest M 01.00 submission and compare row 0300 against the 34.7% average. If you are below, document why. If you are above, make sure the surplus is not masking a maturity cliff in your eligible liabilities that would erode the ratio over the next 12-18 months.

Review Your M 04.00 Maturity Profile

Check the maturity breakdown in M 04.00. How much of your eligible liabilities sits in the 1-to-2-year residual maturity bucket? If the answer is a significant portion, your MREL ratio has a built-in decline that needs to be offset by new issuance or retained earnings growth.

Cross-Check With Your SRB or NRA Decision

Your MREL target is set by your resolution authority (the SRB for banks under its remit, or the national resolution authority). The 34.7% TREA is an EU average. Your binding target may be higher or lower. Make sure your reported ratio in M 01.00 clears your institution-specific requirement, not just the EU average.

Validate Your Pillar 3 KM2 Disclosure

Ensure the figures in your EU KM2 Pillar 3 table are consistent with your M 01.00 data. The mapping is mechanical, but rounding differences or timing mismatches between reporting and disclosure reference dates can create apparent inconsistencies that are difficult to explain to analysts.

Check for COREP and MREL Consistency

The own funds component of your MREL ratio should be consistent with your COREP C 01.00 own funds data. Any mismatch between CET1, AT1, and Tier 2 figures across the two reporting frameworks is a data quality issue. The EBA’s emphasis on the alignment between COREP own funds templates and M-series reporting means this consistency check should be on your routine validation list.

Frequently Asked Questions

What is the MREL TREA ratio and how is it calculated?

The MREL TREA ratio is the total of own funds and eligible liabilities divided by the Total Risk Exposure Amount. It is reported in template M 01.00, row 0300. The EBA’s assessment found an EU average of 34.7% at end-2024.

Does the 34.7% figure include own funds or just eligible liabilities?

It includes both. Own funds (CET1, AT1, Tier 2) account for an average of 20.5% TREA. The remaining approximately 14.2% TREA comes from eligible liabilities instruments such as senior non-preferred bonds and subordinated debt.

What is a senior non-preferred (SNP) instrument?

An SNP instrument is a debt instrument that ranks below ordinary senior unsecured debt but above subordinated debt in the creditor hierarchy. It was introduced specifically to help banks meet MREL subordination requirements. Most EU jurisdictions have implemented national legislation enabling SNP issuance.

How does this assessment affect my reporting obligations?

It does not change the reporting templates or deadlines directly. However, it creates an implicit benchmark. If your MREL ratio or composition is materially different from the EU averages in the report, expect questions from your resolution authority. Use the report as a prompt to validate your data.

Is this relevant for banks under the SRB or only national resolution authorities?

Both. The assessment covers all EU resolution entities regardless of whether they fall under the SRB or a national resolution authority (NRA). The data comes from MREL/TLAC reporting templates submitted to both types of authority.

What happens if my MREL ratio is below 34.7% TREA?

The 34.7% is an average, not a minimum. Your binding target is set by your resolution authority and may be lower or higher. However, being significantly below the average may indicate that your institution’s loss-absorbing capacity is thin relative to peers, which could attract supervisory attention.

Will the MREL reporting templates change soon?

The EBA is working on framework simplification recommendations. Template changes are possible within the next two to three years but are not imminent. For now, the M-series templates remain as specified in the current ITS.

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Key Takeaways

  • EU banks averaged 34.7% TREA in MREL-eligible resources by end-2024, with own funds accounting for 20.5% TREA of that total.
  • EUR 371 billion in MREL-eligible instruments were issued in 2024, with senior non-preferred (SNP) bonds as the dominant instrument type.
  • Smaller banks rely primarily on CET1 and retained earnings for MREL, creating a more fragile compliance position tied to capital volatility.
  • Template M 01.00 row 0300 is where your MREL TREA ratio sits. Compare it against the 34.7% average as a benchmark exercise.
  • The maturity profile in M 04.00 is a leading indicator. Eligible liabilities approaching the one-year residual maturity threshold will mechanically reduce your MREL ratio.
  • Pillar 3 EU KM2 disclosures now face an implicit public benchmark. Below-average ratios should be explained in your narrative.
  • This is the EBA’s final assessment under the current Article 45l(2) BRRD mandate. Framework simplification may alter future reporting requirements.

Sources and References

Disclaimer: The information on RegReportingDesk.com is for educational and informational purposes only. It does not constitute legal, regulatory, tax, or compliance advice. Always consult your compliance officer, legal counsel, or the relevant supervisory authority for guidance specific to your institution.

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