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FINANCIALS: BoE Resolvability: More To Do On MREL Data

FINANCIALS
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BoE is publishing its UK bank resolvability assessment today, which indicates progress has been made but that work remains to be done. Eight banks were assessed, only StanChart received a “shortcoming” grade on one of the areas examined here. Nationwide, NatWest and Santander UK received clean reports. We can see further alterations to MREL terms coming with new issuance but shouldn’t be a spread impact now.

  • The third RAF is being postponed a year (to 2026-27) to give banks more time to “enhance and progress testing”. This next one will focus on “Continuity and Restructuring” outcomes, looking at banks’ ability to identify and address reasons for failure and restore viable operations. This current RAF has focused on “Adequate Financial Resources” and the findings are seen as a “reassurance” by the BoE.
  • The BoE reports “The eight major UK firms have continued to make significant progress” in resolution planning but this RAF has uncovered new issues. No banks have “deficiencies” or “substantive impediments” but one (StanChart) does have a “shortcoming” (relating to Continuity and Restructuring). Five (incl. StanChart) have “areas for further enhancement”. Only Nationwide, NatWest and Santander UK
  • Thematic findings include one on MREL instruments, indicating greater data clarity and granularity may be needed. We can see this resulting in changes to issuance docs, as older MREL instruments mature and are refi’d.
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BoE is publishing its UK bank resolvability assessment today, which indicates progress has been made but that work remains to be done. Eight banks were assessed, only StanChart received a “shortcoming” grade on one of the areas examined here. Nationwide, NatWest and Santander UK received clean reports. We can see further alterations to MREL terms coming with new issuance but shouldn’t be a spread impact now.

  • The third RAF is being postponed a year (to 2026-27) to give banks more time to “enhance and progress testing”. This next one will focus on “Continuity and Restructuring” outcomes, looking at banks’ ability to identify and address reasons for failure and restore viable operations. This current RAF has focused on “Adequate Financial Resources” and the findings are seen as a “reassurance” by the BoE.
  • The BoE reports “The eight major UK firms have continued to make significant progress” in resolution planning but this RAF has uncovered new issues. No banks have “deficiencies” or “substantive impediments” but one (StanChart) does have a “shortcoming” (relating to Continuity and Restructuring). Five (incl. StanChart) have “areas for further enhancement”. Only Nationwide, NatWest and Santander UK
  • Thematic findings include one on MREL instruments, indicating greater data clarity and granularity may be needed. We can see this resulting in changes to issuance docs, as older MREL instruments mature and are refi’d.