It would be more appropriate for the EBA to link the index to existing instruments, the CRD and draft Recovery and Resolution Directive (RRD) rather than any stand alone index.
A link to credit quality would be equally appropriate. This would be particularly helpful for issuers in third countries.
For issuers from third countries, their home state’s government securities may be more appropriate.
The factor should be linked to the nature, scale and complexity of the firm, its risk profile and its range of Code/Identified Staff.
The period should be linked to the nature, scale and complexity of the firm, its risk profile and its range of Code/Identified Staff.
Yes.
Yes.
The obvious cost is the compliance one, keeping track of developments and recording them.
Yes.
Yes.
Yes.
As above, we do not know if there is a demand for such instruments, especially from non-bank issuers (but caught in the scope of CRD), but think that as 40% of the investors, i.e. the employees of the issuers, can sell their stock of bonds, in whole or in part, after their deferral and retention periods have expired, demand and pricing may face downward pressure. In addition, such issuance will have to be considered by boards and investors, which takes time and costs money. As such, we do not believe that it is appropriate to require firms which are not of systemic importance and/or intermediate credit to issue them.
