FIN.

UK Finance calls for urgent review of BoE MREL proposals

UK Finance has responded to the BoE consultation on its approach to setting a minimum requirement for own funds and eligible liabilities (MREL). It says the Bank must radically change its approach to both the assets and transaction accounts thresholds, to reflect regulatory reforms, technological advances and consumer preferences. It calls for the BoE to be coordinated in its approach both with international regulators and standards and with the PRA – it says it is not helpful that the PRA and the BoE Resolution Directorate currently diverge in approach to legal opinion requirements for regulatory capital instruments and that they should take a consistent and coordinated approach. It says the BoE must consider how the MREL and other proposals from the Resolution Directorate meet the growth and competitiveness objectives and should publish a full CBA.

Separately, the BoE has written to the Financial Services Regulation Committee to explain its stance and why it has proposed the new total assets thresholds – but UK Finance says that if the thresholds are to remain at all, they should be a lot higher.

Michael Lewis