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European banks may need up to €790B in MREL-compliant debt, EBA says

European banks may need to sell as much as €790 billion inloss-absorbing liabilities to meet new regulations, according to the EuropeanBanking Authority.

In its quantitative study into the minimum requirement foreligible liabilities, or MREL, the EBA said lenders would need as much as €470billion under its toughest calibration. If senior unsecured debt was notincluded in MREL, and an equivalent increase in junior debt required, thisfigure could jump to €790 billion.

The MREL framework is designed to prevent taxpayer moneybeing used in the event of bank failures.