ECB’s de Guindos: AT1 Would Shift Closer to Equity Under Proposed Changes

11 December 2025

By Marta Vilar - MADRID (Econostream) - European Central Bank Vice President Luis de Guindos said on Thursday that the ECB’s proposed supervisory simplifications would make Additional Tier 1 instruments more akin to equity.

Speaking at a briefing on the recommendations of the ECB’s High-Level Task Force on Simplification, de Guindos said the Governing Council aimed to enhance AT1’s loss-absorption capacity and bring the instruments “closer to equity”, but avoided specifying how that would be achieved.

Pressed on whether coupon-skipping could be one route, he declined to discuss individual design changes, noting only that the shift toward equity-like features could be pursued via coupons “but also through other elements”.

Should the European Commission adopt the ECB’s suggestions, “AT1 will be more similar to equity, and I do not think this is a tightening,” he said, stressing that the instruments would remain part of minimum capital requirements.

Asked about the implications for banks’ competitiveness, de Guindos said the recommendations would not weaken capital requirements and would in fact represent a “clear advantage” for European institutions.