In adopting IFRS 9, banks will be allowed to decide whether to allocate government securities to portfolios other than the AFS one. The consequences of the introduction of the MREL requirements will also be far from negligible, as banks will need to issue liabilities capable of absorbing losses if a resolution procedure is initiated.
When fully phased in, the rules will make crisis management easier, but in the short term they will increase costs by a factor that will depend on the choices − still being debated − regarding the calibration of the requirement and the nature of eligible liabilities.