EBA · 2013_527 Final Q&A

Grandfathered Instruments and Deduction Threshold Exemptions

Regulation
Regulation (EU) No 575/2013 (CRR)
Article
46, 48, 470
Topic
Own funds
Submitted by
Credit institution
Submitted
2013-11-13
Answered
2014-04-30
Answer provided by
ESAs (EBA, ESMA, EIOPA)
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Question

When calculating the amount of Common Equity Tier 1 (CET 1) that is multiplied by 10%/17.65% for the purposes of threshold exemptions for deductions, should grandfathered instruments be included in the amount of CET1 to the extent that they qualify as CET 1 during the grandfathering period?

Background

For example, if an institution had €10bn CET 1 (post deductions) excluding grandfathered instruments and had an additional €2bn grandfathered CET 1 that was eligible as a State aid instrument under Article 483 (or other instrument under Article 484), should the 10% threshold come to €1bn or €1.2bn until 31 December 2017?

Answer

Common Equity Tier 1 (CET1) instruments that are eligible for grandfathering under Articles 483 and 484 of Regulation (EU) No. 575/2013 may be included in CET1 items for the purposes of calculating thresholds for exemptions from deduction.

Original source: European Banking Authority, Q&A ID 2013_527

This Q&A is published by European Banking Authority and is non-binding. It does not constitute legal advice. Updated weekly from official ESA sources.

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