EBA Concludes Legacy Instruments Monitoring Work

EBA Press Releases

Published February 25th, 2026

Detected March 6th, 2026

Summary

The European Banking Authority (EBA) has concluded its dedicated monitoring of legacy instruments, which are financial instruments benefiting from grandfathering provisions under CRR1 and CRR2. The EBA will no longer prioritize this specific monitoring, trusting competent authorities to handle remaining cases based on existing guidance.

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What changed

The European Banking Authority (EBA) has announced the conclusion of its dedicated work on monitoring legacy instruments within financial institutions' capital structures. This decision aligns with the EBA's long-standing objective to phase out such instruments, which benefit from grandfathering provisions under the Capital Requirements Regulation (CRR1 and CRR2). The EBA has previously issued opinions and conducted monitoring to support this phasing out process.

While the EBA will cease prioritizing the monitoring of legacy instruments, it will continue its broader review of the quality of own funds and eligible liabilities. Competent authorities are expected to manage any remaining specific cases based on the guidance previously provided by the EBA. This change signifies a shift in the EBA's focus rather than a relaxation of prudential standards.

Source document (simplified)

The EBΑ concludes work on legacy instruments monitoring

News
25 February 2026

The European Banking Authority (EBA) has decided to conclude its dedicated work on the monitoring of legacy instruments, in line with its long-standing expectation that such instruments should be eliminated over time. The phasing out of legacy instruments is essential to maintain a clear subordination ranking within institutions’ capital structures and to avoid unnecessary complexity in the prudential framework.

In the context of its broader monitoring of the quality of own funds and eligible liabilities, the EBA has over recent years devoted significant attention to legacy instruments, namely on own funds instruments benefiting from grandfathering provisions under the Capital Requirements Regulation (CRR1 and CRR2).

To support institutions and competent authorities in phasing out these instruments, the EBA has undertaken a series of actions. These encompassed the publication in 2020 and in 2022 of two Opinions on the prudential treatment of legacy instruments (Opinion on the prudential treatment of legacy instruments and Opinion on legacy instruments: outcome of its implementation) and the regular monitoring of the stock of such legacy instruments, including through assessments of individual cases.

Given the extensive work already carried out and with confidence that competent authorities will continue to monitor the remaining limited and specific cases on the basis of the guidance provided, the EBA will not prioritise the monitoring of legacy instruments, while maintaining its review of the quality of own funds and eligible liabilities.