EBA publishes 2013 risk dashboard: EBA has published its risk dashboard for Q4 2013, which looks at the evolution of Key Risk Indicators from 55 banks across the EU in the third quarter of 2013. The latest results show that EU banks' capital positions were fairly stable, although declining Risk Weighted Assets contributed to higher capital ratios. EBA is still concerned about the quality of banks' loan portfolios. EBA dashboard notes funding conditions in 2013 have markedly improved, with most banks able to cover their funding needs via market funding, including unsecured and new-style debt instruments. But many banks are still substantially relying on central bank funding. EBA is still concerned about fragmentation of funding markets and uneven cost conditions. (Source: EBA Updates Risk Dashboard)

EBA opens discussion on banks' employee pensions: EBA has published a discussion paper on whether the revised International Accounting Standard 19, together with the deduction of pension assets from Common Equity and changes on pension liabilities, could lead to undue volatility of a bank's own funds. EBA must submit a report to the Commission, which will then decide whether to propose legislation to adjust the treatment of pensions in the calculation of own funds. (Source:Discussion on Impact on Own Funds of Changes in the Treatment of Defined Benefit Pension Plans)

EBA publishes RTS on variable remuneration instruments: EBA has published the final draft RTS on the classes of instruments that are appropriate to be used for the purposes of variable remuneration. The fourth Capital Requirements Directive establishes that at least 50% of any variable remuneration must be in shares or additional Tier 1 or Tier 2 instruments that can be converted to Common Equity Tier 1 (CET 1) instruments or written down while the institution is still a going concern. The RTS set the trigger for conversion or write-down at 7% of CET 1, establish the minimum maturity of the instruments and require that at least 60% be issued to other investors. (Source: Final RTS on Classes of Instruments Used for Variable Remuneration)