The rule in plain words
The absolute value of (-) own funds instruments and eligible liabilities instruments issued by non-resolution entities of the same resolution group cannot be less than the absolute value of (-) of which: own funds instruments issued by liquidation entities.
EBA checks it for two columns: internal MREL and internal TLAC. That makes two checks. A failure names the one that failed.
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
The first of its checks, word for word as the report shows it when it fails. The others read the same, with their own column, row or sheet.
Internal MREL: the absolute value of (-) Own funds instruments and eligible liabilities instruments issued by non-resolution entities of the same resolution group >= the absolute value of (-) of which: Own funds instruments issued by liquidation entities
What to do if your filing fails it
- 01Open the template below and find the cells the rule reads.
- 02Compare the values in your file. If the first is smaller than it may be, one of them is wrong: check both before you change either.
- 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 03.00 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
Internal MREL and internal TLAC (ILAC) (M 03.00)
Rows
- 0290(-) Own funds instruments and eligible liabilities instruments issued by non-resolution entities of the same resolution group
- 0293(-) of which: Own funds instruments issued by liquidation entities
Columns
- 0010Internal MREL
- 0020Internal TLAC
Show the rule as writtenShowHide
EBA's formula, as written out for the first of its checks. Cells are written as {template, row, column, sheet}.
abs({M_03.00,r0290,c0010,}) >= abs({M_03.00,r0293,c0010,})The next one:
abs({M_03.00,r0290,c0020,}) >= abs({M_03.00,r0293,c0020,})Other rules on M 03.00
- Own funds and eligible liabilities as a percentage of the total risk exposure amount cannot be less than permitted guarantees (v22344_m)Warning
- Own funds and eligible liabilities as a percentage of the total exposure measure cannot be less than permitted guarantees (v22345_m)Warning
- Each of the six values it checks in internal MREL and internal TLAC (ILAC) cannot be more than zero (v22357_s)Warning
- A conditional check on internal MREL and internal TLAC (ILAC) (v22545_m)Warning
- A conditional check on internal MREL and internal TLAC (ILAC) (v22546_m)Warning
- Internal TLAC cannot be negative (v10840_s)Warning
- The sum of three rows cannot be more than liabilities and own funds less excluded liabilities (v10817_m)Not run yet
- Eligible own funds, internal MREL plus eligible liabilities and guarantees, internal MREL cannot be more than own funds and eligible liabilities for the purpose of internal MREL (all sheets added up) (v10816_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.