Carosio, who was making a speech in front of the economic and monetary affairs committee of the European Parliament in Brussels said that when it came to the definition of financial institutions’ own funds, CEBS stood "ready to revisit its guidelines to further align them with the expected evolutions in the global regulatory framework with regards to the definition of capital instruments."
CEBS published its guidelines last December for the convergence of supervisory practices with regards to hybrid instruments. Carosio said the guidelines would be applied from the end of 2010 together with the respective Capital Requirement Directive (CRD) amendments.
The CEBS publication was quickly followed by the publication of the consultation paper from the Basel Committee on Banking Supervision (BCBS) which also looks at what bank capital bases should be made of.
The Basel consultation paper appears to be at odds with CEBS with regards to the definition and features that hybrid capital can contain, such as step-ups.
Some market participants had questioned whether CEBS would be going ahead with the implementation of its guidelines and the amendments to the CRD as initially planned or would take into account what Basel said.
There has not bee any issuance of hybrid tier one capital since the Basel consultation paper came out in December as banks and their advisers try to work out what grandfathering rules are going to apply to hybrids and what features will be allowed in hybrid deals under the new regulatory framework.
The CEBS chairman said the committee will conduct a parallel quantitative impact study (QIS) to the one conducted by the Basel committee which will rely on the same methodology but will be extended to include a number of other institutions to which the CRD applies and countries that are not represented in the BCBS.
The study will "allow also the consideration of the differential impact of alternative definition of the rules and will include questions to address EU specificities," Carosio said. First findings are expected to be at the end of June, beginning of July. The analysis will also "help defining transitional periods for the phasing in of the new rules, for example, through grandfathering clauses," Carosio said.