BaFin published a new general order, which regulates how newly issued shares in cooperative banks with the permission of BaFin can be classified as common equity tier 1 (CET 1) instruments. The general decree applies until the end of 2019. It only concerns cooperative banks that are not subject to the direct supervision of ECB.
This announcement of the general order is pursuant to certain articles in the Capital Requirements Regulation or CRR (575/2013) on prudential requirements for credit institutions and investment firms. It is also related to amending the European Markets Infrastructure Regulation or EMIR (648/2012) and Article 32 ( 2) of the Delegated Regulation No 241/2014 of EC, supplementing CRR with regard to the regulatory technical standards for own funds requirements for institutions. The previous general ruling on CET 1 instruments at cooperative banks was limited until December 31, 2018.
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Keywords: Europe, Germany, Banking, CET 1, Regulatory Capital, Own Funds Requirement, CRR, BaFin