AI Summary of Article 80 Continuing review of the quality of own funds and eligible liabilities instruments
The European Banking Authority (EBA) is tasked with overseeing the quality of own funds and eligible liabilities instruments across the Union. In situations where significant deficiencies are identified, EBA must promptly notify the Commission, providing specific details on the shortfall and recommending necessary actions.
Furthermore, EBA will offer technical advice on potential changes to definitions of own funds and eligible liabilities in light of market developments and legal standards. By 1 January 2014, EBA aims to deliver recommendations on the treatment of unrealised gains at fair value, aligning with international accounting and prudential standards.
Article 80 Continuing review of the quality of own funds and eligible liabilities instruments
1. EBA shall monitor the quality of own funds and eligible liabilities instruments issued by institutions across the Union and shall notify the Commission immediately where there is significant evidence that those instruments do not meet the respective eligibility criteria set out in this Regulation.
Competent authorities shall, without delay and upon request by EBA, forward all information to EBA that EBA considers relevant concerning new capital instruments or new types of liabilities issued in order to enable EBA to monitor the quality of own funds and eligible liabilities instruments issued by institutions across the Union.
2. A notification shall include the following:
(a) a detailed explanation of the nature and extent of the shortfall identified;
(b) technical advice on the action by the Commission that EBA considers to be necessary;
(c) significant developments in the methodology of EBA for stress testing the solvency of institutions.
3. EBA shall provide technical advice to the Commission on any significant changes it considers to be required to the definition of own funds and eligible liabilities as a result of any of the following:
(a) relevant developments in market standards or practice;