The Committee of European Banking Supervisors (CEBS) today publishes its implementation guidelines on capital instruments.
The revised Capital Requirements Directive (CRD) introduces explicit rules for the treatment of instruments eligible as capital and, in particular, requirements for their inclusion in institutions’ original own funds without limit. The amendments will need to be transposed into Member States’ national law by 31 October 2010 and will be applied from 31 December 2010.
This work is in response to Article 63a (6) of the revised CRD that requires CEBS to elaborate guidelines for the convergence of supervisory practices with regard to the instruments referred to in point (a) of Article 57.
On the basis of these provisions, a set of 10 criteria has been developed for the assessment of capital instruments that may be included in original own funds without limit. These criteria form the basis of CEBS’s guidelines.
On the basis of Recital 4 of the Directive 2009/111/EC (CRD II), CEBS has taken into account the specificities of non-joint-stock companies such as co-operatives and mutuals when elaborating these criteria.
CEBS is prepared to take into account future changes in the global regulatory framework with regard to the definition of capital instruments in its guidelines on Article 57(a) as far as necessary.
The European Banking Authority was established by Regulation (EC) No. 1093/2010 of the European Parliament and of the Council of 24 November 2010. The EBA has officially come into being as of 1 January 2011 and has taken over all existing and ongoing tasks and responsibilities from the Committee of European Banking Supervisors (CEBS). The EBA acts as a hub and spoke network of EU and national bodies safeguarding public values such as the stability of the financial system, the transparency of markets and financial products and the protection of depositors and investors.