Minimum requirements for own funds and eligible liabilities (MREL)

In order for the Debt Office to implement resolution measures, the bank or institution being managed must have a sufficient amount of own funds and liabilities that can be written down or converted into equity. The Debt Office therefore sets a minimum requirement for eligible liabilities for each bank and institution.


The minimum requirement for own funds and eligible liabilities requirement is usually referred to by its abbreviation MREL.

Questions and answers regarding MREL

MREL is designed to ensure that there are sufficient resources to write down or convert into equity if a bank or other financial institution is in crisis. This allows the central government to intervene quickly in order to maintain the critical operations of that institution, without using tax money. The requirement also helps clarify which lenders are to bear the costs of the crisis management process.

Minimum requirement amount

MREL is the sum of two parts:

  • Loss absorption amount: This corresponds approximately to the financial institution’s total capital requirement but with the exception of certain components. The capital requirement is set by Finansinspektionen (the Swedish Financial Supervisory Authority).
  • Recapitalisation amount: The amount corresponds to the amount needed to restore capital so that the institution will comply with the applicable capital requirement after resolution. Smaller, non-systemically important institutions that the Debt Office deems can be wound up through bankruptcy proceedings or liquidation, instead of resolution, receive a recapitalisation amount of zero. This is the case for the vast majority of Swedish banks and institutions.

The Debt Office determines the level of MREL on the basis of applicable national and EU legal and regulatory frameworks.

How the minimum requirement is met

We also evaluate how banks and institutions meet the requirement. This evaluation is based on the fulfilment of the following principles:

  • Liability proportion: MREL must be met by a certain proportion of liabilities. As this corresponds to the amount of recapitalisation, the liabilities proportion principle is not applied to non-systemically important institutions that can be managed through bankruptcy proceedings or liquidation without threatening general financial stability.
  • Subordination: This applies from 1 January 2024 and entails that the minimum requirement from that time forward shall be fully met with subordinated instruments that can be written down or converted before other liabilities such as deposits from large companies or bank bonds.

If the bank or institution does not comply with these principles, the Debt Office will initiate a review to determine whether there are material impediments to applying resolution.

Subordinated liabilities are built up gradually

Requiring subordination of the liabilities used to meet MREL means that institutions must replace part of their current funding with new subordinated liabilities. Institutions are allowed to successively build up the volume of required subordinated liabilities until 2024. During the transitional period, the Debt Office will monitor the build-up to ensure that it is progressing at a reasonable pace.

Rules for obtaining permission to reduce eligible liabilities instruments

Banks and institutions subject to MREL must obtain prior permission from the Debt Office in order to call, redeem, repay or repurchase eligible liabilities instruments before their contractual maturity date. The document below describes what an application to the Debt Office for such permission must contain, as well as other relevant information.

Memorandum: Reduce eligible liabilities instruments (only in swedish).

Swedish insolvency ranking

The Debt office has compiled information on the ranking of items in Swedish insolvency proceedings. The statement is published in accordance with article 8 in commission implementing regulation (EU) 2021/763 of 23 April 2021 laying down implementing technical standards for the application of Regulation (EU) No 575/2013 of the European Parliament and of the Council and Directive 2014/59/EU of the European Parliament and of the Council with regard to the supervisory reporting and public disclosure of the minimum requirement for own funds and eligible liabilities.

Statement of Swedish insolvency ranking

Quarterly follow-up

Once every quarter, the Debt Office publishes a report on its monitoring of how systemically important banks and institutions comply with MREL. The first of these reports was published in November 2019.

To the reports on MREL compliance


Report: Application of the minimum requirement for own funds and eligible liabilities

Read more about the Debt Office’s method for determining the level of MREL and the principles for how the requirement shall be met.

Open the report