EBA updates list of CET1 instruments

The European Banking Authority (EBA) published today an updated list of capital instruments that Competent Authorities across the European Union (EU) and for the first time the European Economic Area (EEA) have classified as Common Equity Tier 1 (CET1). Since the publication of the previous update in December 2021, the CET1 instruments compliant with the Capital Requirements Regulation (CRR) and issued by institutions from Iceland, Liechtenstein and Norway have been added to the list. The list will be maintained and updated on a regular basis.

Since the publication of the last updated list of CET1 capital instruments on 8 December 2021, the EBA has continued monitoring and assessing the capital instruments issued by EU institutions and their eligibility towards the criteria set in the CRR. A new type of instruments issued by Spanish investment firms has been added as it was assessed and evaluated as compliant with the CRR. According to the Spanish national law, this type of instrument may only be issued by investment firms and, therefore, a dedicated mark has been introduced to highlight this limitation. For ease of reference, a new row has been added and highlighted to flag this new instrument.

Following the Joint Committee EEA Decision adopting the CRR1 that entered into force on 1 January 2020, the EBA assessed all types of CET1 instruments issued in the EEA counties in order to add them to the CET1 list. Given that all instruments were considered as fully compliant with the eligibility criteria set out in the CRR, the instruments are now included in the updated CET1 list and new highlighted rows have been added to flag these instruments.

Furthermore, a few instruments no longer used by institutions have been deleted in order to reflect only instruments used in the EU or EEA on the list. 

Finally, a few minor amendments have been introduced in the column referring to the national provisions in order to mirror legislative changes or to provide further clarifications.

For the purpose of correctly reading this list, the EBA recommends taking into account the caveats described in the intro section of the list.

Legal basis and next steps

Article 26(3) of the CRR mandates the EBA to establish, maintain and publish a list of all the forms of capital instruments in each Member State that qualify as CET1. In addition, Article 80(1) mandates the Authority to monitor the quality of own funds instruments and notify the Commission immediately where there is significant evidence of those instruments not meeting the criteria set out in Article 28 or, where applicable, Article 29.

As part of the banking package and taking as a basis the EBA ‘Opinion on own funds' in the context of the CRR review published on 23 May 2017, the own funds provisions of the CRR have been amended including the EBA powers in relation to the CET1 list. In particular, the CRR2 provides for the EBA to be consulted ex ante for new forms of instruments that are not yet included in the CET1 list in order for them to be classified as CET1 instruments.