Combined assessment of MREL
Article 7
1. Resolution authorities shall ensure that MREL is sufficient to allow the write down or conversion of an amount of own funds and qualifying eligible liabilities at least equal to the sum of loss absorption and the recapitalisation amounts, as determined by the resolution authorities in accordance with Articles 1 and 2, subject to provisions laid down in Articles 3 to 6. 2. Resolution authorities shall express the calculated MREL as a percentage of total liabilities and own funds of the institution, with derivative liabilities included in the total liabilities on the basis that full recognition is given to counterparty netting rights. 3. Resolution authorities shall establish a schedule or process for updating the MREL, taking into account: (a) the need to update the MREL in parallel with the assessment of resolvability; (b) whether the volatility of the entity or group's total liabilities and own funds as a result of its business model would be likely to result in the MREL no longer being appropriate at an earlier date.