The European Banking Authority
(EBA) has said that the upcoming Capital Reporting Requirements
(CRR2) may clarify which instruments banks can include in
common equity tier 1 (CET1). This follows the recent annulment
of a European Central Bank (ECB) decision on six French banks
that special deposits should be reclassified.
"Under the current negotiation of CRR2,
co-legislators are discussing a potential clarification of this
article on when a prior approval from the supervisor will be
required, but we do not know the final text as
yet," Delphine Reymondon, the EBA’s head of
liquidity, leverage, loss absorbency and capital told IFLR.
The EBA has already publicly communicated
that article 26.3 of the capital reporting requirements (CRR)
regulation, which instruments banks can include as part of CET1
with the prior approval of the supervisor can be read
differently, and that there are different supervisory
approaches across the EU.