9  As described, there is more to do in some of these areas. But increasingly the emphasis is on implementation and, with it, assurance – how we supervise firms against these regulatory requirements and hold them to account that identified barriers to resolvability are removed and stay removed. In describing the progress towards end-state resolvability, I want to pick out three areas that will be a focus in the period ahead. (a) Internal MREL The first is internal MREL. One lesson that the crisis brought home is that the distribution of resources within groups matters. While in life, firms might want to run themselves by business lines on a consolidated basis, failure and resolution occurs at legal entity level. It is understandable then that since the crisis that there has been a discernible tendency for host authorities to hold onto more resources, capital and liquidity, or to force activity in branches into subsidiaries. The aim at FSB level with TLAC was to lean against this tendency towards fragmentation of international groups by providing comfort to authorities cross-border, not only that groups would have sufficient external TLAC to be resolvable but also that resources would be prepositioned as internal TLAC in material subsidiaries in host jurisdictions. Previous international regulation of financial resources in groups has, like the Basel Accord, typically focussed more on the consolidated level. Now applying TLAC regulation at legal entity level has brought with it challenges.
One is timing: it is hard to roll out internal TLAC for a group until TLAC requirements are in place in all the jurisdictions relevant for the material subsidiaries. The Bank is in the middle of consulting on its internal 10  MREL policy but many other jurisdictions – notably the Banking Union, Switzerland and Japan – have still not set policy. Another challenge is arithmetic: to the extent that there are financial dependencies between legal entities within a group the sum of solo RWAs is likely to be greater than consolidated RWAs. If a full TLAC requirement were applied to each subsidiary then the sum of the internal TLAC would exceed the consolidated TLAC requirement for the group as a whole. 9  The Bank of England published loss-absorbing capacity requirements for major UK banks in 2016 shortly after responding to the Treasury Committee’s inquiry into capital. See http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/treasury-committee/capital-andresolution/written/69208.pdf. 10 The Bank of England published a consultation paper on its approach to setting a minimum requirement for own funds and eligible liabilities (MREL) within groups on 2 October 2017. See https://www.bankofengland.co.uk/-/media/boe/files/financialstability/resolution/internal-mrel-consultation-october-2017.pdf?la=en&hash=33594C3FB3C7F1D129033AFE4E3A2BF20A4F9AA8 . 5  All speeches are available online at www.bankofengland.co.uk/speeches  5  This was addressed in the TLAC term sheet in two ways: -  by limiting internal TLAC only to subgroups and subsidiaries that are material to the group, accounting for more than 5% of RWAs or income.