The report presents the latest data on prudential capital, leverage, and liquidity ratios for European GSIBs, and illustrates the performance of debt and contingent convertible (CoCo) securities issued by European banks.

Among the main findings of this report:

• The end-point CET1 ratio of European GSIBs increased to 14.4% in Q3 2023 from 13.9% in Q4 2022:

The increase was driven by lower RWAs and solid earnings retention.

Interim dividends and buyback programmes have partially offset the gradual year-to-date and quarterly increase. Only during 3Q23, 7 out of the 11 GSIBs repurchased part of their capital.

8 out of the 29 monitored European countries increased their national countercyclical buffers in 3Q23.

• AT1 market resumes issuance, followed by lower risk premia:

Following the market turbulence of March-May 2023, the AT1 market has shown signs of normalisation.

AT1 issuance began to recover from the third quarter of 2023 and is currently on track to return to pre-March issuance levels. AT1 option-adjusted spreads have gradually tightened in tandem.

• Agreement reached on the Basel III package in the EU:

The summary in the box on pages 20-23 outlines the agreement reached by the European Parliament and the European Council on December 6 on the CRR3 and CRD6 proposal, which will implement the final Basel III package in the EU and conclude an era of regulatory review of prudential standards for banking institutions.

As we look ahead at a long and complex implementation phase, it is important that the EU is flexible with regards to the implementation date, particularly with respect to market risk standards, to ensure global consistency and avoid harming its capital market competitiveness.