The European Banking Authority was asked if a bank could boost its capital ratio by insuring against the possibility of its deferred tax assets (DTAs) not converting into tax credits. The EBA said no.
The EBA published its decision on Friday in response to a question that was submitted back in September.
The question related to an institution with DTAs qualifying for a 100% risk weighting.
The institution planned to enter into a risk mitigation agreement covering the risk of the