ECB published a letter on amendments to the Annexes to public guidance on the review of qualification of capital instruments as additional tier 1 and tier 2 instruments. The Annexes to the public guidance include templates on the main features of the instruments and on the self-assessment to be performed by the entity on the eligibility conditions. The templates are being updated to reflect the eligibility criteria newly introduced in the revised Capital Requirements Regulation or CRR 2 (2019/876). CRR 2 amended several provisions concerning the eligibility conditions that capital instruments must fulfil to be classified as additional tier 1 or tier 2 instruments, pursuant to Articles 52 and 63, respectively.
For each of the items mentioned in Annex 1 to the letter, the entity should provide the relevant information that should be based on the applicable provisions contained in the agreement governing the capital instrument or any other relevant document. Entities must review and assess each capital instrument against the requirements for own funds set out in the relevant provisions of the CRR and the regulatory technical standards on own funds, taking into consideration the relevant EBA questions and answers and the EBA report on the monitoring of additional tier 1 issuances. An entity must provide all the relevant information to confirm that the conditions have been met. It must also copy or refer to the applicable provisions in the agreement governing the capital instrument and any other relevant documents and refer to the applicable EBA questions and answers that have been taken into consideration. Annex 2 to the letter contains the standard self-assessment templates on eligibility conditions of the additional tier 1 and tier 2 capital instruments.
Related Link: Letter (PDF)
Keywords: Europe, EU, Banking, Reporting, Regulatory Capital, CRR2, Additional Tier 1, Additional Tier 2, Basel, ECB
Previous ArticleEBA Sets Out Work Priorities and Deliverables for 2021
ESAs published the final draft implementing technical standards on reporting of intra-group transactions and risk concentration of financial conglomerates subject to the supplementary supervision in EU.
EBA published the annual report on asset encumbrance of banks in EU.
FED updated the reporting form and instructions for the FR Y-9C report on consolidated financial statements for holding companies.
EBA issued a consultation paper on the guidelines on monitoring of the threshold and other procedural aspects of the establishment of intermediate EU parent undertakings, or IPUs, as laid down in the Capital Requirements Directive.
EC published Regulation 2021/25 that addresses amendments related to the financial reporting consequences of replacement of the existing interest rate benchmarks with alternative reference rates.
BIS published a bulletin, or a note, that examines the cyber threat landscape in the context of the pandemic and discusses policies to reduce risks to financial stability.
HM Treasury, also known as HMT, has updated the table containing the list of the equivalence decisions that came into effect in UK at the end of the transition period of its withdrawal from EU.
EBA published an erratum for technical package on phase 1 of the reporting framework 3.0.
APRA updated a frequently asked question (FAQ), for authorized deposit-taking institutions, on the measurement of credit risk weighted assets.
ECB published a letter from Andrea Enria, the Chair of the Supervisory Board of ECB, answering questions raised by the President of the Bundestag (the German federal parliament) on how ECB assesses the financial stability of the euro area in the context of the significant level of nonperforming loans.