EBA · 2023_6920 Rejected question

Definition of elligible capital

Regulation
Regulation (EU) No 575/2013 (CRR)
Article
517
Topic
Own funds
Submitted by
Individual
Submitted
2023-10-23
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Question

Can a parent company give a guarantee to investors of new shares in a bank and back it with their own assets? Or can a sister company invest in a bank? Can a bank lend to a company that already holds AT1 instruments of a bank? If so, is there a deduction? What if that company's investment in the bank is not a significant proportion of its portfolio and the bank's failure would not jeopardise the loan? What if the bank lends to a company that will use the loan to buy the bank's planned issue of AT1 instruments, but the loan is backed by high quality collateral?

Background

All questions related to definition of elligible capital
No answer published yet.

Original source: European Banking Authority, Q&A ID 2023_6920

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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