MREL for mortgage credit institutions: necessary and inexpensive

Analysis - December 2018 - No. 23

Authors Danmarks Nationalbank
Subject Financial regulation; Financial legislation; Denmarks Nationalbank´s analyses of financial stability
Type Analysis
Year 2018
Published 3 December 2018
Despite the introduction of a minimum requirement of 8 per cent of total liabilities and own funds, the requirements for some SIFIs remain too low to enable recapitalisation and continuation in a crisis situation. A risk-sensitive MREL for mortgage credit institutions is necessary in order to ensure that there are sufficient funds to resolve them in a crisis situation. The cost of introducing an MREL for mortgage credit institutions is low. Converted into an increase in administration margins, it corresponds to an increase of less than 1 basis point on average.