MREL 2026 Correction: What Banks and Investment Firms Must Review

Key data

Banks and investment firms subject to the Single Resolution Mechanism have a new review obligation: the rectification published on 3 September 2026 corrects the text of Regulation (EU) 2019/877, the standard that establishes MREL requirements—Minimum Requirement for own funds and Eligible Liabilities—to ensure that an entity can absorb losses and be recapitalized without public funds.

The correction remedies material errors or translation issues detected in the version published in Official Journal L 150 of 7 June 2019. Although it is a technical rectification, its scope can be significant: if the error affected a ratio, a threshold, or a key definition, the entity's actual obligation may differ from what it has been applying.

What does this regulation establish?

To understand the scope of the correction, it is useful to clarify the regulatory architecture it modifies:

MREL is, in essence, the buffer that the SRB requires from each entity so that, if it enters resolution, shareholders and creditors—not taxpayers—bear the losses. The original 2019 standard established how to calculate that buffer, which instruments are eligible, and how they should be integrated into individual resolution plans.

A rectification in that text is not a policy change: it is the correction of what the standard should always have said. But this means that if the entity has been interpreting the erroneous text, it may have been calculating its MREL incorrectly or structuring its eligible liabilities improperly.

Economic and operational impact

The direct impact depends on which part of the text has been corrected—information not specified in the available publication—but the risk vectors are clear:

• Capital ratios: If the correction affects MREL thresholds or percentages, the entity may need to issue more eligible debt or adjust its capital structure.
• Resolution plans: Plans approved by the SRB are based on the current regulatory text. A correction may require reviewing and updating those plans.
• Eligible liability instruments: If the correction modifies which liabilities count as MREL, some debt issuances could cease to be valid, or conversely, new instruments could become eligible.
• Compliance cost: Internal review of plans, legal analysis of the corrected text, and potential updating of issuances entail direct operational and legal costs for treasury, risk, and compliance departments.

Larger entities—especially those of systemic importance supervised directly by the SRB—have greater exposure, given that their MREL requirements are higher and their resolution plans more complex.

Who does it affect?

• Credit institutions subject to the EU Single Resolution Mechanism (mainly banks in the eurozone and participating Member States)
• Investment firms included in the scope of Regulation (EU) 806/2014
• Treasury and ALM departments responsible for the structure of eligible liabilities
• Compliance and resolution teams that maintain and update resolution plans before the SRB
• Legal advisors and consultants assisting financial entities in resolution planning and MREL requirement compliance
• CFOs and financial directors of banking entities with debt issuances structured according to MREL requirements

Practical example

Imagine a mid-sized bank headquartered in Spain, subject to SRB supervision, with a resolution plan approved in 2023 and an MREL liability structure calculated in accordance with the text of Regulation (EU) 2019/877 published in OJ L 150 of 7.6.2019.

Following publication of this rectification, the compliance team must:

1. Locate the corrected text in the EU Official Journal and identify exactly which articles or sections have been modified.
2. Compare the corrected text with the one used as the basis for calculating the current MREL and drafting the resolution plan.
3. If there is divergence, assess whether the capital ratio or composition of eligible liabilities must be adjusted, and on what timeline.
4. Communicate to the SRB any material changes to the resolution plan resulting from the correction.

This process, although technical, can have direct economic consequences if it requires new subordinated debt issuances or restructuring of existing instruments.

What should companies do now?

1. Access the corrected text: Download the rectified version of Regulation (EU) 2019/877 from EUR-Lex (CELEX:32019R0877R(04)) and identify the articles or sections affected by the correction.
2. Compare with the version applied so far: Review which version of the text was used as the basis for calculating the current MREL and for preparing the resolution plan approved by the SRB.
3. Assess the impact on ratios and plans: Determine whether the correction modifies any specific obligation: capital thresholds, definition of eligible liabilities, compliance timelines, or subordination requirements.
4. Update internal documentation: If there is divergence, update MREL calculation models, resolution plan documentation, and compliance records.
5. Communicate to the SRB if necessary: If the correction implies material changes to the resolution plan, notify the Single Resolution Board within the applicable timelines.
6. Involve external legal team: Given the technical nature and implications for debt issuances, it is advisable that advisors specialized in European banking regulation validate the interpretation of the corrected text.

Official source

Consult complete regulation at official source

Disclaimer: This article is for informational purposes only and does not constitute legal advice. For specific decisions, consult a qualified professional. Source: https://eur-lex.europa.eu/./legal-content/AUTO/?uri=CELEX:32019R0877R(04)