On 20 December 2013, the European Commission sought technical advice from the European Banking Authority (EBA) to determine whether or not the definition of ‘eligible capital’ in the Capital Requirements Regulation (CRR) is appropriate for defining ‘large exposures’, setting ‘large exposures’ limits, determining the capital requirements applicable to investment firms with limited investment services and determining the prudential treatment for qualifying holdings outside the financial sector.

The EBA has now published an opinion on the appropriateness of the definition of “eligible capital” in the CRR. In its opinion, the EBA provides general comments on ‘eligible capital’, that are relevant both for the large exposures framework as well as for investment firms and qualifying holdings. In addition, the EBA provides specific comments applicable only to the ‘eligible capital’ definition in the large exposures framework.

View Opinion of the European Banking Authority on the review of the appropriateness of the definition of ‘eligible capital’ pursuant to Article 517 of Regulation (EU) No 575/2013, 17 February 2015