TLAC subordination requirements loom in Europe
EC favours excluding derivatives from MREL and taking French approach to subordination
After months of wrangling in Europe over how to set bank bail-in buffer requirements, the European Commission is leaning towards rules that would converge with international standards requiring the explicit subordination of bail-in debt, while excluding liabilities such as derivatives and structured notes.
The EC is due to review existing legislation, the Bank Recovery and Resolution Directive (BRRD), by the end of this year, to decide how to integrate the Financial Stability Board's (FSB)
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