SRB Bi-annual reporting note to Eurogroup – May 2025

SRB Bi-annual reporting note to Eurogroup – May 2025 Financial stability, a key prerequisite for a competitive and resilient economy, rests on a number of factors. In the bank crisis management space, these factors can be split in four broad categories: 1. ex-ante capacity building by the banks, 2. operationalisation of those capabilities, 3. a complete and flexible crisis management toolkit and, finally, 4. seamless international cooperation. This Eurogroup reporting note gives an update on the status of these four aspects of the SRB’s work. 1. Banks’ ex-ante capacity building 1a. MREL and the SRF In order to be resolvable, among other things, banks need to be able to absorb losses and recapitalise after resolution. This is ensured by imposing a minimum requirement for own funds and eligible liabilities (MREL). All banks in the SRB’s remit, except for a handful of special situations, have reached full MREL compliance. Also, smaller banks, called less significant institutions (LSIs), in the remit of National Resolution Authorities are well advanced too. In practice, these MREL buffers should shield depositors and taxpayers from absorbing bank losses. In fact, adequate MREL resources translate into a more resilient economy and a fairer financial sector in which banking sector’s losses are not collectivised. In addition, the Single Resolution Fund (SRF) is now fully funded and mutualised. These EUR 80 billion, contributed over the years by the...