The EBA published the first final draft technical standards on own funds. Its actually a bundle that complements CRR IV, the new European regulation on capital.
Haven’t had the time to digest fthe final versions, but there are four pieces, according to the EBA website:
- The RTS on own funds part I specify elements of own funds: Common Equity Tier 1 (CET1) capital, Additional Tier 1 capital, Tier 2 capital, deductions, and transitional provisions for own funds in terms of grandfathering. Check for the Tier~1 write down and rules on flexibility on payments.
- The RTS on Gain on Sale specify further the concept and the treatment of a gain on sale, defined as any increase (or part of an increase) in equity under the applicable accounting framework arising from future margin income in the context of a securitisation transaction.
- The RTS on own funds part II specify the conditions under which competent authorities may determine that a type of undertaking recognised under applicable national law qualifies as a mutual, cooperative society, savings institution or similar institution for the purpose of calculating own funds. Finally,
- The ITS on disclosure for own funds focus on disclosure requirements and aim at increasing transparency on regulatory capital held by European institutions.
Congratulations EBA on this achievement!