Strategic Shareholder Climate and Risk Financial Financial Barclays PLC 373 report information sustainability report Governance review review statements Annual Report 2022 Supervision and regulation (continued) instruments, tier 2 capital instruments and there are no shortcomings, deficiencies or structural and other information from internal eligible liabilities at the point of substantive impediments identified in the Barclays Bank Ireland PLC on a regular basis, as well as engaging with the bank to non-viability of an institution. Group’s resolution capabilities that could impede its ability to execute the preferred identify and address impediments to The BoE’s preferred approach for the resolution strategy. In future, should any resolution. This work is done in resolution of the Group is a bail-in strategy such issues be identified, the PRA/BoE coordination with the BoE, as the Group with a single point of entry at Barclays PLC. could exercise its various powers to direct resolution authority. Barclays Bank Ireland Under such a strategy, Barclays PLC’s PLC will need to meet the SRB’s the Group to address the relevant issues. subsidiaries would remain operational while requirements for resolution as set out in Barclays PLC’s capital instruments and While regulators in many jurisdictions have the SRB’s ‘Expectations for Banks’ eligible liabilities would be written down or indicated a preference for single point of document by 31 December 2023. converted to equity in order to recapitalise entry resolution for the Group, additional the Group and allow for the continued resolution or bankruptcy provisions may TLAC and MREL provision of services and operations apply to certain Group entities or The Group is under the supervision of the throughout the resolution. The order in branches. BoE, as the UK resolution authority, and is which the bail-in tool is applied reflects the subject to a Minimum Requirement for In the US, BUSL is subject to the Orderly hierarchy of capital instruments under UK own funds and Eligible Liabilities (MREL), Liquidation Authority established by Title II CRD IV and otherwise respecting the which includes a component reflecting the of the Dodd-Frank Act (DFA), a regime for hierarchy of claims in an ordinary FSB’s standards on total loss absorbency the orderly liquidation of systemically insolvency. Accordingly, the more capacity (TLAC). important financial institutions by the subordinated the claim, the more likely FDIC, as an alternative to proceedings The MREL requirements were fully losses will be suffered by owners of the under the US Bankruptcy Code. In addition, implemented by 1 January 2022, from claim. the licensing authorities of Barclays Bank which time G-SIBs with resolution entities PLC New York branch and of Barclays Bank The PRA has made rules that require incorporated in the UK are required to authorised firms to draw up recovery plans Delaware have the authority to take meet an MREL equivalent to the higher of: and resolution packs, as required by the possession of the business and property (i) two times the sum of their Pillar 1 and BRRD. Recovery plans are designed to of the applicable branch or entity they Pillar 2A requirements; or (ii) the higher of outline credible actions that authorised license and/or to revoke or suspend such two times their leverage ratio requirement licence. firms could implement in the event of or 6.75% of leverage exposures. Internal severe stress in order to restore their MREL for operating subsidiaries is subject In the US, Title I of the DFA, as amended, business to a stable and sustainable to a scalar in the 75-90% range of the and the implementing regulations issued condition. Removal of potential external requirement that would apply to by the FRB and the FDIC require each bank impediments to an orderly resolution of a the subsidiary if it were a resolution entity. holding company with assets of $250bn or banking group or one or more of its The starting point for the scalar is 90% for more, including those within the Group, to subsidiaries is considered as part of the ring-fenced bank sub-groups. prepare and submit a plan for the orderly BoE’s and PRA’s supervisory strategy for resolution of subsidiaries and operations in Barclays Bank Ireland PLC is subject to the each firm, and the PRA can require firms to the event of future material financial SRB’s MREL policy, as issued in June 2022, make significant changes in order to distress or failure. The Group submitted a in respect of the internal MREL that it will enhance resolvability. The submission of “targeted plan” in December 2021. The be required to issue to the Group. The resolution packs was suspended by the agencies did not identify any shortcomings SRB’s current calibration of internal MREL PRA in 2018 until further notice and or deficiencies with the Group’s 2021 US for non-resolution entities is expressed as replaced by annual EBA resolution Resolution Plan. The Group’s next two ratios that have to be met in parallel: reporting. The Group has provided the submission of the US Resolution Plan in (a) two times the sum of: (i) the firm’s Pillar PRA with a recovery plan annually, respect of its US operations will be a “full 1 requirement; and (ii) its Pillar 2 however, the PRA notified in October 2022 plan” due in 2024. requirement; and (b) two times the that it has moved submission to a biennial leverage ratio requirement. The SRB’s Barclays Bank Ireland PLC is required by submission cycle. The Barclays Group policy does not apply any scalar in respect the ECB to submit a standalone BRRD continues to maintain the recovery plan of the internal MREL requirement. Under compliant recovery plan on an annual annually. the SRB MREL policy, a bank specific basis. As a Significant Institution under Under the Resolvability Assessment adjustment can be applied by the SRB to direct ECB supervision, Barclays Bank Framework (RAF) firms are required to MREL requirements. Ireland PLC falls within the remit of the EU have in place capabilities covering three Single Resolution Board (SRB), as the In the US, the FRB’s TLAC rule includes resolvability outcomes: (i) adequate resolution authority for the Eurozone. provisions that require BUSL to have: (i) a financial resources; (ii) being able to Under the provisions of the BRRD and EU specified outstanding amount of eligible continue to do business through Single Resolution Mechanism Regulation long-term debt; (ii) a specified outstanding resolution and restructuring; and (iii) being (SRMR), the SRB is required to determine amount of TLAC (consisting of common able to communicate and co-ordinate the optimal resolution strategy for and preferred equity regulatory capital plus within the firm and with authorities. The Barclays Bank Ireland PLC and, also, to eligible long-term debt); and (iii) a specified first self-assessment report on these prepare a resolution plan for the bank. The common equity buffer. In addition, the capabilities was submitted by the Group to SRB undertakes this work within the FRB’s TLAC rule prohibits BUSL, for so the PRA/BoE in 2021 and public context of the BoE’s preferred resolution long as the Group’s overall resolution plan disclosures by both firms and the PRA/BoE strategy of single point of entry with bail in treats BUSL as a non-resolution entity, were made in June 2022 (and are required at Barclays PLC. In order to carry out its from issuing TLAC to entities other than every two years thereafter). The Bank of mandate, the SRB collects detailed those within the Group. England’s assessment concluded that