On 11 July 2016, the European Banking Authority (“EBA”) published a draft of its second Report on the monitoring of Additional Tier 1 (“AT1”) instruments of EU institutions. The Report was undertaken pursuant to Article 80 of the Capital Requirements Regulation (“CRR”) which requires the EBA to monitor the quality of own funds instruments issued by EU institutions. The EBA published its initial monitoring report in May 2015.

The EBA notes that the CRR sets out eligibility criteria for AT1 instruments and that the CRR provisions are supplemented by Regulatory Technical Standards (“RTS”). There have been a number of issues of AT1 capital instruments by EU institutions based on such criteria. In preparing its Report, the EBA records that it has reviewed 33 AT1 issuances, issued between August 2013 and December 2015, and has assessed the terms and conditions of such issuances against the criteria specified in the CRR and the RTS.