EBA updates some important Q&As in the area of own funds and eligible liabilities

The European Banking Authority (EBA) has updated some of its existing Q&As on own funds and eligible liabilities to ensure consistency with the revised final draft Regulatory Technical Standards (RTS) on own funds and eligible liabilities submitted to the European Commission in May 2021 (eventid=11260).
Despite the fact that the RTS have not yet been officially adopted, the EBA felt it was important to inform institutions and market participants of certain undisputed RTS-related facts that are crucial to their ability to effectively implement both the Capital Requirements Regulation (CRR) and the RTS.
The EBA modified Q&A 2017 3277 in particular with regard to the concept of „sufficient assurance“, relevant when an institution must deduct from its own funds the amounts for which it has already received approval from the competent authorities. When exercising a call option specified in an instrument’s terms and conditions, the call’s announcement to the instrument’s holders is when sufficient certainty is regarded to exist, and only then will the necessary deduction be made.
In order to extend the treatment initially given to own funds instruments to eligible liabilities, the EBA amends other current Q&As. This is in line with the strategy outlined in the final draft RTS that was published on own funds and eligible liabilities, which also emphasized the significance of the previous permission regime for eligible liabilities, which pursues the same goals as the permission regime for own funds.