On October 7, 2014, the European Banking Authority (“EBA”) issued a report on the monitoring of Additional Tier 1 (“AT1”) capital instruments of EU firms. Under the Capital Requirements Regulation (“CRR”), the EBA must monitor the quality of own funds instruments issued by firms across the European Union. Eligibility criteria for AT1 instruments are laid down in the CRR and are supplemented further with regulatory technical standards on own funds. A number of AT1 instruments have now been issued by EU institutions, and the EBA has assessed the terms and conditions of some of these issuances against the relevant regulatory provisions and requirements. The report states that for future issuances, some existing clauses should be revised, some clauses currently under consideration should be avoided and that there are a number of areas that require further guidance to ensure that a common interpretation of the CRR provisions is applied.

The report is not intended to be fully comprehensive and is available at:

http://www.eba.europa.eu/documents/10180/534414/report+AT1.pdf.