Italian bail-in proposal raises MREL fears

Author: Ben Bschor | Published: 14 Sep 2015

An Italian proposal to change the ranking of creditors in bail-in could avoid the problems that a similar German proposal is confronted with, but it comes with its own problems. Certain instruments might cease to qualify for MREL, lawyers have warned.

The Italian draft decree, published in late July, will implement the Bank Recovery and Resolution Directive (BRRD), which all EU member states were required to transpose into national legislation by January 1 2015.

Changes to the creditor hierarchy are not directly foreseen by the BRRD. But several EU member states have in recent months proposed or implemented adjustments to the insolvency ranking to make it easier for banks to comply with European and global capital requirements, known as minimum requirement for eligible liabilities (MREL) and total loss-absorbing capacity (TLAC) respectively.

The aim of MREL is to ensure that banks have in place an adequate stock of liabilities that can...



close Register today to read IFLR's global coverage

Get unlimited access to for 7 days*, including the latest regulatory developments in the global financial sector, updated daily.

  • Deal Analysis
  • Expert Opinion
  • Best Practice


*all IFLR's global coverage published in the last 3 months.

Read IFLR's global coverage whenever and wherever you want for 7 days with IFLR mobile app for iPad and iPhone

"The format of the Review has changed over the years; the high quality of its substantive content has not."
Lee C Buchheit, Cleary Gottlieb