EBA publishes response to letter received on reclassification of grandfathered own funds instruments

On 21 December 2018, the European Banking Authority (EBA) published a response to a letter it had received from a law firm regarding the case of a reclassification by an institution of some specific grandfathered own funds instruments. The EBA also addressed this issue through its Q&A process. In particular, Q&A 2018_4417 (Own funds - Reclassification of own funds instruments from a grandfathered category to a fully eligible category and purpose of grandfathering provision), clarifies in more general terms the appropriate prudential treatment for such cases.