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Archive » July / August 2023 » Mrel and funding of significant italian banks: expectations and some concerns

Mrel and funding of significant italian banks: expectations and some concerns

Lorenzo Faccincani, Michele Rutigliano
July / August 2023 - n. 7-8
Keywords: Banche, funding, Mrel
Jel codes: G21, G28

From 1 January 2024 the Mrel requirement will be binding for significant Italian banks. The Mrel contributes positively to the privatization of losses in the event of a banking crisis, but at the same time it influences the structure of funding and consequently also the loan portfolio. The latter must generate revenues that offset the funding costs of Mrel-eligible liabilities, also taking into account that in the future these will most likely be more penalizing than in recent years. The presence of banks otherwise able to find resources Mrel-compliant and, in any case, not at the same conditions could also cause a distortion of the competitive framework.

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