EBA Final Guidelines on Third-Country Branch Capital Endowment

JD Supra Trade Law

Published March 11th, 2026

Detected March 12th, 2026

Summary

The European Banking Authority (EBA) has published final guidelines on instruments that third-country branches can use to meet their capital endowment requirements under CRD IV. These guidelines clarify which debt securities and other instruments are acceptable and set operational conditions for their use.

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What changed

The European Banking Authority (EBA) has issued final guidelines clarifying the instruments that third-country branches (TCBs) can use to meet their capital endowment requirements under CRD IV, as amended by CRD VI. The guidelines specify that, in addition to cash, certain government debt, and debt securities with a 0% risk weight under the standardized approach, TCBs must also meet minimum operational conditions to ensure these instruments are available for immediate use in case of risks, losses, or resolution.

These final guidelines introduce no substantive changes from the previously consulted draft, with only minor clarifications. Competent authorities must report their compliance within two months of the official EU language translations being published. The guidelines will apply from January 11, 2027, requiring TCBs and their supervisors to ensure compliance with the specified instruments and operational conditions by this date.

What to do next

Review the EBA's final guidelines on third-country branch capital endowment instruments.
Assess current capital endowment instruments against the specified criteria and operational conditions.
Ensure compliance with the guidelines by the effective date of January 11, 2027.

Source document (simplified)

March 11, 2026

EBA Final Guidelines On Instruments For Third-Country Branch Capital Endowment Requirement Under CRD IV

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The European Banking Authority (EBA) has published its final guidelines on instruments available for third-country branches (TCBs) for unrestricted and immediate use to cover risks or losses under Article 48e(2)(c) of the Capital Requirements Directive (2013/36/EU) (CRD IV). Under Article 48e of the CRD IV Directive, as amended by Directive (EU) 2024/1619 (CRD VI), an authorised TCB must maintain a minimum capital endowment at all times. Article 48e(2)(c) specifies that it may use for this purpose instruments that are available to the TCB for unrestricted and immediate use to cover risks or losses as soon as those occur. The EBA was mandated to issue guidelines on the instruments that can be used for this purpose.

Further to its July 2025 consultation, the EBA does not indicate any substantive changes from the initial draft guidelines apart from minor clarifications. The guidelines, as consulted on, specify that, in addition to cash and certain government debt already listed in the CRD IV, the most suitable financial instruments for the purposes of Article 48e(2)(c) are debt securities that would receive a 0% risk weight under the standardised approach for credit risk under the Capital Requirements Regulation (575/2013) (CRR) and that are issued or guaranteed by central, regional or local governments, or central banks, public sector entities, multilateral development banks or international organisations. In addition, to ensure that these other instruments are available for use for the purposes of Article 96 of the Bank Recovery and Resolution Directive 2014/59/EU (BRRD) in the case of resolution of the TCB and for the purposes of the winding-up of the TCB, the guidelines also specify the minimum operational conditions that third-country branches should respect. The guidelines will now be translated into the official EU languages and published on the EBA website. The deadline for competent authorities to report whether they comply with the guidelines will be two months after the publication of the translations. The guidelines will apply from 11 January 2027.

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