The rule in plain words
Own funds, minimum requirement for own funds and eligible liabilities (MREL) plus eligible liabilities items before adjustments, minimum requirement for own funds and eligible liabilities (MREL) cannot be more than own funds and eligible liabilities potentially eligible for meeting MREL (all sheets added up).
The headline gives only the kind of check and the template, because the rule is too long to say in a headline. The plain words above say all of it.
How the Line4 Check report words itShowHide
Word for word as the report shows it when the rule fails.
M_02.00.A: (Eligible) Own funds, Minimum requirement for own funds and eligible liabilities (MREL) + M_02.00.A: Eligible liabilities items before adjustments, Minimum requirement for own funds and eligible liabilities (MREL) <= M_06.00: Of which: own funds and eligible liabilities potentially eligible for meeting MREL (all sheets added up)
What to do if your filing fails it
- 01Open the templates below and find the cells the rule reads.
- 02Work out both sides from your file, as the rule in plain words sets out, and compare them.
- 03EBA allows a small rounding difference, worked out from the decimals each value is reported with.
- 04It runs only when your filing indicators mark M 02.00 and M 06.00 as reported.
- 05This is a warning. It does not stop the filing on its own, but your authority may ask you to explain it.
The cells it reads
MREL and TLAC capacity and composition (resolution groups / entities) (TLAC1) (I) (M 02.00.a)
Rows
- 0020(Eligible) Own funds
- 0070Eligible liabilities items before adjustments
Column
- 0010Minimum requirement for own funds and eligible liabilities (MREL)
Creditor ranking (resolution entities) (TLAC3) (M 06.00)
Column
- 0060Of which: own funds and eligible liabilities potentially eligible for meeting MREL
Show the rule as writtenShowHide
EBA's formula. Cells are written as {template, row, column, sheet}.
{M_02.00.a,r0020,c0010,} + {M_02.00.a,r0070,c0010,} <= sum({M_06.00,,c0060,})Other rules on M 02.00.a
- Eligible liabilities items before adjustments must equal the sum of its two parts (v10847_h)Warning
- Minimum requirement for own funds and eligible liabilities (MREL) must be reported (e10772_e)Warning
- A check on MREL and TLAC capacity and composition (resolution groups / entities) (TLAC1) (I), and MREL and TLAC capacity and composition (resolution groups / entities) (TLAC1) (III) (M 02.00.c, v10769_m)Not run yet
- A check on MREL and TLAC capacity and composition (resolution groups / entities) (TLAC1) (I), and MREL and TLAC capacity and composition (resolution groups / entities) (TLAC1) (III) (M 02.00.c, v10768_m)Not run yet
- A check on MREL and TLAC capacity and composition (resolution groups / entities) (TLAC1) (I), and MREL and TLAC capacity and composition (resolution groups / entities) (TLAC1) (III) (M 02.00.c, v10767_m)Not run yet
- Requirement for own funds and eligible liabilities for G-SIIs (TLAC) cannot be more than zero (v10859_s)Warning
- Investments in subordinated eligible liabilities of other institutions (under memorandum items) must equal the sum of its three parts (v10766_m)Warning
- Combined buffer requirement must equal the sum of its four parts (v10765_m)Warning
Every MREL and TLAC rule, by template
Checks like this one, run at the point of submission, are the first step to real-time supervision.