EBA Final Guidelines on Capital Endowment for Third-Country Branches

EBA Press Releases

Published March 2nd, 2026

Detected March 6th, 2026

Summary

The European Banking Authority (EBA) has published final Guidelines specifying eligible instruments for the capital endowment requirement for third-country branches. These guidelines clarify which financial instruments can be used and the operational conditions required to protect local depositors and creditors.

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What changed

The European Banking Authority (EBA) has issued final Guidelines detailing the instruments that third-country branches can use to meet their capital endowment requirements under the Capital Requirements Directive (CRD). The Guidelines identify specific financial instruments, such as those issued or guaranteed by governments or multilateral development banks that receive a 0% risk weight, as eligible. They also establish minimum operational conditions to ensure these instruments are available for unrestricted and immediate use to absorb risks or losses, thereby protecting local depositors and creditors in case of resolution or winding-up.

These final Guidelines are binding for third-country branches operating within the EU. Financial institutions must review their current capital endowment instruments and operational arrangements to ensure compliance with the specified eligibility criteria and conditions. While no specific compliance deadline is mentioned in this press release, regulated entities should ensure their practices align with these final guidelines to avoid potential regulatory scrutiny. The guidelines aim to ensure consistent implementation of the new third-country branch regime.

What to do next

Review current capital endowment instruments for third-country branches against the EBA's eligibility criteria.
Ensure operational arrangements meet the minimum conditions for instrument availability.
Update internal policies and procedures to reflect the final Guidelines.

Source document (simplified)

The EBA publishes its final Guidelines on instruments for the capital endowment requirement for third-country branches

Press Release
2 March 2026

The European Banking Authority (EBA) today published its final Guidelines on instruments for the capital endowment requirement for third-country branches under the Capital Requirements Directive (CRD). The Guidelines set out the list of instruments that third-country branches may use to meet their capital endowment requirement and specify the minimum operational conditions that ensure these instruments are available when needed. The overall objective is to ensure that the capital endowment assets protect local depositors at the level of the third country branch, or they remain available to pay appropriate claims and satisfy local creditors in the event of resolution or winding-up of the third country branch.

To ensure that the capital endowment instruments are available to the third-country branch for unrestricted and immediate use to absorb risks or losses, the EBA has identified as eligible those financial instruments issued or guaranteed by central, regional, or local governments, central banks, public sector entities, multilateral development banks, or international organisations that would receive a 0% risk weight under the standardised approach for credit risk.

The Guidelines also clarify minimum operational conditions that third-country branches must meet so that the capital endowment instruments effectively serve their purpose and remain available in the event of resolution or winding-up of the third-country branch.

Legal basis and background

Article 48e(2) of Directive 2013/36/EU specifies the forms of instruments that could be used in the event of the resolution or winding up of the third-country branch, including ‘any other instrument that is available to the third-country branch for unrestricted and immediate use to cover risks or losses as soon as those occur’. Article 48e(4) of Directive 2013/36/EU mandates the EBA to specify the requirements for such ‘other instruments’.

These final Guidelines build on the public consultation conducted in 2025, during which the EBA collected feedback on the list of eligible instruments and the related operational conditions. They contribute to the consistent implementation of the new third-country branch regime introduced by the CRD.