Go Preventive or Go Home – The Double Nature of MREL

Abstract Bank Resolution is considered a cornerstone of the post-crisis financial regulation; however, it also widely ineffective and inefficient in handling bank failures. This article analyses preventive potential resolution framework, specifically focusing on minimum requirement for own funds eligible liabilities (MREL). We argue that MREL has double nature. On one hand, should ensure feasibility case failure. other aims at restricting funding model banks, similarly to (preventive) capital requirements. By analysing 2019 reform EU banking regulation, we contend represents an important complement rest regulatory framework latest unleashes such potential. demonstrate new rules determination enforcement allow authority look after build-up systemic risk. The analysis reveals can serve both micro- macro-prudential purposes. Finally, current institutional architecture main impeding factor regulation efficiently work, curbing positive MREL.