The compliance of banks with MREL requirements – Q3 2021

Press release 2 December 2021

At the end of the third quarter, all banks complied with the minimum requirements for own funds and eligible liabilities (MREL requirements) set by the Swedish National Debt Office. This is presented in the Debt Office’s latest quarterly report published today.

If a systemically important bank or financial institution experiences a crisis, the Debt Office can assume control of it and implement crisis management measures to safeguard financial stability. This procedure, called resolution, is intended to enable the central government to manage an institution in crisis without having to resort to using taxpayers’ money to rescue it. Instead, the institution’s shareholders and investors are to bear the costs of crisis management.

Requirements for a certain amount of own funds and liabilities

As a way to ensure that institutions have sufficient resources to finance the crisis management, the Debt Office sets requirements for them to have a certain level of own funds and liabilities that can be used to absorb losses and to restore capital in a crisis. Accordingly, the Debt Office makes annual decisions on minimum requirements for own funds and eligible liabilities (MREL requirements).

The Debt Office publishes a quarterly report on how well the institutions are meeting these requirements. The most recent report, published today, presents MREL compliance as of the end of the third quarter of 2021. It shows that all systemically important institutions met the requirements.

The report also shows that all the institutions had a sufficient amount of liabilities required to comply with the Debt Office’s liabilities proportion principle.

In accordance with the principle for the subordination of liabilities, these liabilities shall, starting 1 January 2024, consist of a specific type of debt called subordinated liabilities. The report shows that, on 30 September 2021, the institutions had issued subordinated liabilities amounting to approximately SEK 113 billion.

The Debt Office intends to make new decisions on MREL in December 2021, in accordance with the changes to the Swedish Resolution Act (2015:1016) that entered into force on 1 July 2021. These decisions will be effective as of 1 January 2022. This means that, starting 1 January 2022, the above mentioned resolvability principles will also cease to apply because proposed changes to the Resolution Act contain stipulations that essentially replace the function of these principles. Until 31 December 2021, the institutions are subject to the current requirements, which are presented in this report.

Report: Crisis Preparedness of Swedish Banks, Q3 2021


The Debt Office’s press function: 08 613 47 01,


Resolution – the central government assumes control

Resolution is only applied for systemically important banks or other financial institutions. The Debt Office conducts an annual assessment of which institutions are to be considered systemically important. During the resolution procedure, the institution continues its operations so that customers have access to their accounts and other services as usual.  

Read more about planning for resolution

Deposit insurance always applies

Protection for depositors is the same regardless of whether an institution goes into bankruptcy or is resolved through resolution.

Read more about the deposit insurance scheme

Banks build up eligible liabilities

For the Debt Office to be able to carry out resolution effectively, the bank or institution must have sufficient own funds and liabilities that can be written down or converted into equity. Therefore, the Debt Office decides on a minimum requirement for eligible liabilities (usually referred to by the abbreviation MREL) for each bank and institution that is deemed systemically important.

The purpose of MREL is to ensure there are sufficient own funds and liabilities that can be written down or converted into equity if a bank or institution is in crisis. This allows the central government to take quick action and maintain the critical functions of the bank or institution without using taxpayers’ money. The requirement also helps clarify which lenders are to bear the primary costs for crisis management.

In November 2019, the Debt Office began publishing the compliance with MREL requirements by each institution.

See all the quarterly reports on compliance with the MREL requirement