Commission seeks feedback on prudential treatment of equity exposures

The Commission has opened a consultation on the prudential treatment of investment in equities by banks under legislative programmes in the Capital Requirements Regulation (CRR). These programmes, established by EU and national laws, provide both public and private financing to businesses operating in specific sectors of the economy. Banks authorized to invest in equity under qualifying legislative programmes benefit from favourable prudential treatment for the calculation of their capital requirements. This means these banks have to put aside less capital than the capital needed when they invest in other equity investments. 

This guidance comes under the Strategy on the Savings and Investments Union (SIU), which emphasized the importance of mobilizing additional private funding, in particular from institutional investors such as banks and insurers, to finance strategic sectors in the EU. Equity financing is crucial in this effort, particularly for fast-growing companies that face greater difficulties in accessing debt markets. 

This guidance aims to ensure that rules on legislative programmes under CRR are applied consistently in the Single Market, promote broader use of these programmes and ultimately increase equity investments, while preserving the soundness of the investing banks. It sets out how banks could apply more favourable prudential treatment to equity investments made under qualifying public programmes. It also explains the conditions under which equity exposures would be eligible, including the presence of significant public subsidies or guarantees, and oversight by public authorities. 

The Commission invites all stakeholders, including civil society, consumers, businesses, financial market participants and member state authorities, to submit their views until 8 September. The contributions will be taken into account when drafting the Communication, expected in the fourth quarter of 2025. 

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