2017年-EBA欧洲银行管理局_EBA_CET1_report_Q2_2017_25页_1mb

EBA Report on the Monitoring of CET1 Instruments Issued by EU Institutions (May 2017)

Core Content and Main Findings

This report outlines the European Banking Authority's (EBA) monitoring of Common Equity Tier 1 (CET1) instruments issued by EU institutions, focusing on the legal framework, list maintenance, and implications of inclusion or exclusion.

Purpose of the Report

The report serves to:

• Provide further guidance on the content and objectives of the CET1 list;
• Clarify the consequences of an instrument being included or excluded from the list;
• Offer feedback on the EBA's monitoring work and lessons learned from CET1 issuances.

It is the first comprehensive report accompanying the fifth update of the CET1 list, which was published in parallel.

Legal Mandate

Under Regulation (EU) No 575/2013 (CRR), the EBA is mandated to:

• Maintain and publish a list of all CET1 instruments in each EU Member State;
• Monitor the quality of own funds instruments and notify the Commission of any significant evidence of non-compliance with Article 28 or 29 of the CRR.

The EBA may remove non-state aid CET1 instruments issued after 28 June 2013 from the list if they do not meet the eligibility criteria, and may make such announcements.

Structure of the CET1 List

Columns and Information Provided

The CET1 list includes the following columns:

• Country of the issuance (Column A): Indicates the jurisdiction where the instrument was issued.
• Name of the instrument (Column B): Provides the name in English and the national language.
• Governing law (Column C): Refers to the local laws governing the instrument.
• Issuance in addition to other CET1 instruments (Column D): Indicates whether the instrument can be issued alongside other CET1 instruments.
• Voting rights (Column E): Specifies whether the instrument includes full, fewer, or no voting rights.
• Fully eligible under Article 28 or 29 (Column F): Indicates whether the instrument fully meets the eligibility criteria under these articles.
• Grandfathered state aid or non-state aid (Columns G and H): Differentiates between instruments that are grandfathered under CRR Articles 483 and 484.
• Capital instrument subscribed by public authorities in emergency situations (Column I): Refers to instruments issued under Article 31 of the CRR.

Number of CET1 Instruments Listed

As of the fifth update, the EBA has listed 130 types of CET1 instruments across 28 EU jurisdictions:

• 65 instruments are fully eligible under Article 28 (joint stock companies);
• 35 instruments are fully eligible under Article 29 (non-joint stock companies);
• 19 are grandfathered non-state aid instruments;
• 10 are grandfathered state aid instruments;
• 1 is a capital instrument subscribed by public authorities under Article 31.

Implications of Inclusion/Exclusion

Exhaustiveness of the List

The CET1 list is intended to be exhaustive, including all forms of CET1 instruments that meet the eligibility criteria. If an instrument is not included, it is not considered eligible for CET1 capital. Competent authorities are responsible for evaluating eligibility and must notify the EBA of new forms. The EBA has the authority to review and potentially remove instruments from the list if they do not meet the criteria.

Monitoring Process

The EBA follows a structured process to monitor CET1 instruments:

• Competent authorities are required to provide standardized documentation, including terms and conditions, national laws, and statutes, to support the eligibility of new instruments.
• The EBA reviews all documentation, including at the level of the Board of Supervisors, and may request clarification from issuing institutions.
• Multiple iterations may be needed to finalize the eligibility and inclusion of new types of instruments.

State Aid vs. Non-State Aid Instruments

• State aid instruments are included in the list based on the decision of the relevant competent authority.
• The inclusion of state aid instruments does not imply that their features should be extended to other institutions in the same Member State.
• The grandfathering of state aid instruments under Article 483 of the CRR will expire at the end of 2017, after which they will no longer be considered eligible CET1 instruments.

Lessons Learnt from CET1 Issuances

Key Criteria Evaluated

The EBA has focused its assessment on:

• Permanence: Whether the instrument is perpetual or has a fixed maturity.
• Loss absorption: The ability of the instrument to absorb losses.
• Flexibility of payments: Including distribution policies, reinstatement of voting rights, and covenants that may affect payment flexibility.

Amendments Requested

In several cases, the EBA has requested amendments to the terms and conditions of CET1 instruments, particularly regarding:

• Permanence
• Loss absorption
• Flexibility of payments, especially in relation to:
  • Preference in the order of payments
  • Distribution policies
  • Reinstatement of voting rights in the absence of dividends
  • Covenants that may undermine payment flexibility

Proportion of Non-Voting Shares

• Most EU jurisdictions impose a limit on non-voting shares, typically up to 50% of share capital.
• Some jurisdictions do not allow non-voting shares at all.
• There are diverse provisions regarding the proportion of shares paid at inception and the period for which shares can remain unpaid.
• Many jurisdictions do not set time limits, while a few require a maximum of 5 years.
• Some jurisdictions impose restrictions on subsequent capital increases, requiring full payment of previous shares, which may raise prudential concerns.

Conclusion

The EBA's CET1 list is a key tool for transparency and consistency in the application of CET1 eligibility criteria across the EU. It includes a wide range of instruments, with a focus on compliance with the CRR and RTS. The report highlights the importance of the EBA's monitoring role, the process for evaluating and updating the list, and the specific implications of state aid and non-state aid instruments. The EBA remains committed to regular updates and further assessments as new developments occur.