{"id":3475,"date":"2024-03-04T11:25:01","date_gmt":"2024-03-04T09:25:01","guid":{"rendered":"https:\/\/ch.jfdi.cc\/?p=3475"},"modified":"2024-03-04T11:25:01","modified_gmt":"2024-03-04T09:25:01","slug":"cyprus-banks-on-track-to-meet-mrel-goals-according-to-srb-chief","status":"publish","type":"post","link":"https:\/\/ch.jfdi.cc\/?p=3475","title":{"rendered":"Cyprus banks on track to meet MREL goals, according to SRB chief"},"content":{"rendered":"<p><img decoding=\"async\" src=\"http:\/\/ch.jfdi.cc\/wp-content\/uploads\/2024\/03\/cyprus-banks-on-track-to-meet-mrel-goals-according-to-srb-chief.jpg\" class=\"ff-og-image-inserted\"><strong>Chair of the Single Resolution Board Dominique Laboureix<\/strong> has commended <strong>Cypriot banks<\/strong> for their progress in aligning with the Minimum Requirements for Own Funds and Eligible Liabilities (<strong>MREL<\/strong>).<\/p>\n<p>It should be noted that MREL serves as a capital tool, incorporating instruments such as bail-in bonds, and secondary capital issued by banks beyond their own funds.This initiative aims to strengthen banks\u2019 capacity to absorb losses and enhance their ability to undergo restructuring in times of crisis, reducing the likelihood of resorting to taxpayer funds.The MREL targets for each bank are set by the Single Resolution Board, which has defined these objectives for the two Cypriot banks, Bank of Cyprus and Hellenic Bank.Speaking to the Cyprus News Agency (CNA), Laboureix noted that Cypriot banks have been granted a longer transitional period, when compared to other European banks, extending until 2024 and 2025.\u201cWhat I can say is that Cypriot banks are on a good path to meet their targets even before the transitional period,\u201d Laboureix said.\u201cTherefore, <strong>Cypriot banks will achieve their goals on time<\/strong>,\u201d he added.Laboureix also explained that the concept of resolution replaces liquidation with an efficient process.\u201c<strong>With resolution, instead of asking taxpayers to pay for the collapse of a bank, as in the past, or even some creditors, as in Cyprus ten years ago, perhaps a better solution is to ask banks to build their resilience by issuing capital instruments<\/strong>,\u201d he stated.Asked about the progress made by the SRB, which, together with the National Resolution Authorities, forms the Single Resolution Mechanism (SRM), Laboureix stated that the council has made \u201ctremendous progress, but the journey is not over\u201d.\u201cWe cannot say that the journey is over because the risks are evolving,\u201d he said, recalling that when the SRB was established in 2015, no one could have imagined the crises that have unfolded since then.These include Covid-19 pandemic, the British gilt crisis, geopolitical risks with Russia\u2019s invasion of Ukraine, conflicts in Gaza, and disruptions in free navigation in the Red Sea.\u201cThus, the level of uncertainty increases, and the risks in the banking sector rise,\u201d he explained, pointing to new challenges from digitisation, including cyber risks, challenges related to the green transition, and the crisis sparked by the collapse of medium-sized banks, such as the deposit run at Silicon Valley Bank and the collapse of the Swiss giant Credit Suisse.He mentioned that European banks have gained the ability to absorb losses, and the SRB has the Single Resolution Fund with <strong>\u20ac78 billion<\/strong>, stating that the situation is \u201cmuch better compared to ten years ago, but, as I said, the journey is not over\u201d.What is more, Laboureix explained that the SRB\u2019s strategy is guided by two issues, including addressing new risks and the smooth exercise of the council\u2019s powers by acquiring necessary data from banks, allowing the SRB to act faster in a potential crisis.\u201cIf we don\u2019t have this data, we won\u2019t be able to act quickly. That\u2019s why it\u2019s essential to move from building MREL, the capacity to absorb losses, to the ability to use these funds in the event of a crisis,\u201d he said.In response to the question of whether the narrative \u201c<strong>too big to fail<\/strong>,\u201d prevalent during the 2008 financial crisis when taxpayers rescued banks, has ended, Laboureix said that \u201c<strong>under normal conditions, we can find other solutions due to the toolkit we have<\/strong>\u201c.He said that the toolkit can be further improved with the European Commission\u2019s proposal for adjusting and further strengthening the existing EU framework for bank crisis management and deposit insurance.Follow the<br \/>\nCyprus Mail  on Google News<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Dominique Laboureix, Chair of the Single Resolution Board, praised Cypriot banks for their progress towards meeting the Minimum Requirements for Own Funds and Eligible Liabilities (MREL). MREL is a capital tool designed to enhance banks&#8217; ability to absorb losses and facilitate restructuring without resorting to taxpayer funds. The Single Resolution Board has set MREL targets for Bank of Cyprus and Hellenic Bank, with Cypriot banks given a longer transitional period until 2024 and 2025. Laboureix expressed confidence that Cypriot banks would achieve their MREL targets on time. He highlighted the shift from liquidation to resolution, aiming to build bank resilience through capital instruments instead of relying on taxpayer or creditor funds. The Single Resolution Board, established in 2015, faces evolving risks including the Covid-19 pandemic, geopolitical tensions, and challenges from digitisation. The Single Resolution Fund has \u20ac78 billion, indicating improved bank loss absorption capacity compared to a decade ago. The SRB&#8217;s strategy focuses on addressing new risks and ensuring swift action in crises by collecting necessary bank data. Laboureix also discussed the potential for further improving the EU framework for bank crisis management and deposit insurance, moving beyond the &#8220;too big to fail&#8221; narrative.<\/p>\n","protected":false},"author":3,"featured_media":3476,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4],"tags":[39,355,611,461,186,357,432,3,356,379,145,308,250,701,19,468,17],"class_list":["post-3475","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cyprus","tag-bank-of-cyprus","tag-banking-and-finance","tag-banks","tag-british","tag-business","tag-businesstop","tag-covid","tag-cyprus","tag-cyprus-business-news","tag-eu","tag-gaza","tag-geopolitical","tag-google","tag-red-sea","tag-russia","tag-tensions","tag-ukraine"],"acf":{"keyphrase":"","keywords":"","sourceimg":"","country-category":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.8 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Cyprus banks on track to meet MREL goals, according to SRB chief<\/title>\n<meta name=\"description\" content=\"bank resolution. 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