The rule in plain words
Internal MREL cannot be negative.
EBA checks it for 24 rows, from total risk exposure amount (0100) to own funds instruments issued by liquidation entities of the same resolution group (0620). That makes 24 checks. A failure names the one that failed.
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: Eligible Additional Tier 1 >= 0
What to do if your filing fails it
- 01Open the template below and find the cells the rule reads.
- 02Look for a value with the wrong sign in these cells, such as an amount entered as a negative number.
- 03EBA compares the values exactly here: there is no rounding tolerance.
- 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
- 0100Total risk exposure amount
- 0110Total exposure measure
- 0200Eligible own funds and eligible liabilities
- 0210Eligible Own funds
- 0220Common Equity Tier 1 capital (CET1)
- 0230Eligible Additional Tier 1
- 0240Eligible T2
- 0250Eligible liabilities and guarantees
- 0260Eligible liabilities (excluding guarantees)
- 0270Guarantees provided by the resolution entity and permitted by the resolution authority
- 0280Memorandum item: Collateralised part of the guarantee
- 0295Excess of deductions from eligible liabilities over eligible liabilities
- 0400Own funds and eligible liabilities as a percentage of the total risk exposure amount
- 0410Of which permitted guarantees
- 0420Own funds and eligible liabilities as a percentage of the total exposure measure
- 0430Of which permitted guarantees
- 0440CET1 (%) available after meeting the entity’s requirements
- 0550Other bailinable liabilities
- 0560Of which governed by third country law
- 0570Of which containing a write down and conversion clause as referred to in Article 55 of Directive 2014/59/EU
- 0580Residual maturity of < 1 year
- 0590Residual maturity of >= 1 year and < 2 years
- 0600Residual maturity of >= 2 years
- 0620Own funds instruments issued by liquidation entities of the same resolution group
Column
- 0010Internal MREL
A worked example
The first of its checks, with simple numbers.
Eligible additional Tier 1, internal MREL must then be at least 0.
A file that reports 0 passes. One that reports -100 fails, by 100.
The numbers are illustrative.
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}.
{M_03.00,r0230,c0010,} >= 0The next five:
{M_03.00,r0210,c0010,} >= 0{M_03.00,r0220,c0010,} >= 0{M_03.00,r0295,c0010,} >= 0{M_03.00,r0440,c0010,} >= 0{M_03.00,r0270,c0010,} >= 0And 18 more, the same formula for the other cells it covers.
Other rules on M 03.00
- A conditional check on internal MREL and internal TLAC (ILAC) (v22546_m)Warning
- A conditional check on internal MREL and internal TLAC (ILAC) (v22545_m)Warning
- Each of the six values it checks in internal MREL and internal TLAC (ILAC) cannot be more than zero (v22357_s)Warning
- Own funds and eligible liabilities as a percentage of the total exposure measure cannot be less than permitted guarantees (v22345_m)Warning
- Own funds and eligible liabilities as a percentage of the total risk exposure amount cannot be less than permitted guarantees (v22344_m)Warning
- A lower-limit check on internal MREL and internal TLAC (ILAC) (v22340_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
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.