CEIOPS published its advise to the Commission on the treatment of “deeply subordinated debt”. CEIOPS, recognising that the characteristics of subordinated debt instruments vary between jurisdictions and hence the industry has argued for a broad definition of such instruments, with principles for eligibility modelled closely on Basel requirements.
CEIOPS also notes that there is a strong body of opinion within the industry that would support a more restricted concept if this would facilitate earlier implementation.
However, CEIOPS would also like to stress that any changes made to the definition of eligible capital elements under Solvency I should not prejudge their treatment under Solvency II. CEIOPS has considered the technical merits of the French proposal and concluded the proposal is technically feasible. CEIOPS supports the aim of achieving cross-sectoral consistency on the definition of capital and is already working closely with CEBS on this issue.
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