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Overview: about the EBRDWho we are
Overview: about the EBRD
Our story
Explore the EBRD’s journey over the decades, investing in businesses, supporting economies and driving lasting change across its regions.
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Overview: how the EBRD operatesWhat we do
Overview: how the EBRD operates
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Across three continents, the EBRD supports the transition to successful market economies.
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Overview: how you can work with the EBRD
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Light
Eng
Eng
“Forging Resilience”
July 2024
Evaluation of the Transition Impact and Additionality of the EBRD’s MREL & Bail-in-able Products [2016-2023]
Background
The EBRD’s engagement with Minimum Requirement for Own Funds and Eligible Liabilities (MREL) and bail-in-able products stems from post-Global Financial Crisis efforts to fortify banking resilience. These instruments have been pivotal in ensuring banks maintain sufficient lossabsorbing capacity, thus reducing reliance on taxpayer-funded bailouts during crises.
Since 2016, the EBRD has committed €3.1 billion across 95 investments in 15 countries. This evaluation — the first by an MDB on MREL and bail-in products — analyses their transition impact and additionality over the period 2016-23. The analysis includes portfolio reviews, case studies in Romania, Poland, and Jordan, and stakeholder interviews. Findings aim to contribute insights to the broader MDB community as it explores roles in MREL markets.
Main findings
The evaluation revealed significant achievements and challenges:
Transition Impact: The EBRD’s MREL investments contributed to capital market development by supporting first-time issuers and facilitating public placements. This aligned with fostering systemic resilience, though strategic alignment with broader market-level outcomes was inconsistent.
Additionality: The Bank demonstrated financial and non-financial additionality, particularly by addressing market gaps in nascent MREL markets. Over time, private sector interest in MREL issuances has grown, signalling a potential decline in additionality.
Green Transition: MREL products have been instrumental in advancing the Green Economy Transition (GET). However, the evaluation flagged that the green impact of GET-eligible MREL bonds remains inadequately measured and their contribution to green finance incremental at best.
Systemic Focus: The EBRD’s approach was often project-focused rather than market-level strategic, limiting its systemic impact. The evaluation stressed the need for a formal Theory of Change to guide strategic investments.
Governance and Reporting: There were gaps in transparency and impact reporting, highlighting the need for more robust monitoring frameworks to evaluate market-wide effects.