A combined reading of Articles 45(1), 45c and 45f of Directive 2014/59/EU (BRRD), clarifies that MREL should be set even for institutions whose preferred strategy is liquidation.

Article 45(1) provides that institutions and entities referred to in Article 1(1), points (b), (c) and (d) are to meet MREL at all times, where required by and in accordance with Articles 45 to 45i.

In this respect, Article 45c(1) requires that the resolution authority set MREL for each institution, after consulting the competent authority and based on criteria that aim at tailoring MREL to the specific situation of the concerned institution. Furthermore, Article 45c(2), second subparagraph, prescribes the resolution authority to assess whether it is appropriate to limit MREL to an amount sufficient to absorb losses for entities whose preferred strategy is liquidation.

Hence, resolution authorities are to set MREL for all institutions, including institutions that have liquidation under normal insolvency proceedings as their resolution strategy. The exception to this rule are the institutions that are explicitly exempted from compliance with the requirement in accordance with Article 45a or that benefit from a waiver in accordance with Articles 45f(3) or (4) and 45g BRRD. For the entities referred to in Article 1(1), points (b), (c) and (d) of Article 1(1), the setting of MREL is mandatory when they have been identified as resolution entities, pursuant to Article 45e, but discretionary when they are not resolution entities in accordance with the second subparagraph of Article 45f(1) – unless the exception in the third subparagraph of that provision applies.