EBA updates single rulebook Q&As: EBA has added five new items to its single rulebook Q&As. (Source: Single Rulebook Q&As)

EBA speaks on SREP framework: Piers Haben spoke on the Common European supervisory review and evaluation process (SREP) framework and EBA Guidelines. In his speech he addressed:

  • the use of the SREP as a comprehensive supervisory view on institutions;
  • challenges raised by banks regarding the EBA Guidelines on SREP including: proportionality, the use of scoring, a common approach to additional capital requirements and the risk of side-lining the individual capital adequacy assessment process and dialogue with institutions; 
  • particular issues in the Guidelines which might be new to supervisors including: business model analysis, the multiple use of stress testing and supervisory outcomes; and
  • supervisory convergence across the EU.

(Source: Common European SREP Framework and EBA Guidelines)

EBA updates on additional Tier 1 monitoring: EBA has published an update to its draft report on the monitoring of Additional Tier 1 (AT1) capital instruments issued by EU institutions. EBA has reviewed 15 AT1 issuances which took place between August 2013 and November 2014. The report:

  • sets out EBA's views on clauses that it recommends be avoided in the terms and conditions of AT1 instruments;
  • clarifies EBA's position on acceptable triggers for regulatory calls and on the conditions for including tax gross-up provisions in the terms and conditions of AT1 instruments;
  • further details the triggers for loss absorption, in particular on Common Equity Tier 1, that should be the basis for setting the triggers for AT1 instruments issued within a banking group; and
  • elaborates on the rationale for disallowing contingent clauses where payments become mandatory if they lose the status of AT1 instruments.

EBA welcomes views on the report and will hold a public hearing on 18 May. EBA expects to publish the final report by the end of May. (EBA Updates its Monitoring of Additional Tier 1 Capital Instruments)