EBA publishes final guidelines on instruments for third-country branch capital requirements

The European Banking Authority (EBA) has published its final Guidelines on instruments for the capital endowment requirement for third-country branches under the Capital Requirements Directive (CRD).

The Guidelines specify the list of instruments that third-country branches may use to meet their capital endowment requirement and outline the minimum operational conditions to ensure these instruments are available when needed.

The objective is to ensure that capital endowment assets protect local depositors or remain available to pay claims and satisfy local creditors in case of resolution or winding-up of the third-country branch.

Eligible instruments include those issued or guaranteed by central, regional, or local governments, central banks, public sector entities, multilateral development banks, or international organizations that would receive a 0% risk weight under the standardised credit risk approach.

The Guidelines also specify operational conditions that third-country branches must meet to ensure the effectiveness and availability of these instruments during resolution or winding-up.

Legal basis: Article 48e(2) and 48e(4) of Directive 2013/36/EU require the EBA to specify eligible instruments and operational conditions for the capital endowment of third-country branches.

The Guidelines follow a public consultation held in 2025, during which feedback was collected on eligible instruments and operational conditions. They support the consistent implementation of the new third-country branch regime introduced by the CRD.