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2 min readWarningEBA reporting framework 4.2Updated 10 November 2026

Tier 2 capital: a calculation check across capital adequacy: own funds definition and capital adequacy: Memorandum items (C 01.00, C 04.00, EBA rule v4816_m)

A warning in the own funds and capital requirements return (COREP own funds), on templates C 01.00, capital adequacy - own funds definition and C 04.00, capital adequacy - Memorandum items.

Check your file against this ruleWhat to do if it fails

The rule in plain words

For tier 2 capital: (-) T2 instruments of financial sector entities where the institution does not have a significant investment times holdings of CET1 capital of financial sector entities where the institution does not have a significant investment, net of short positions plus holdings of AT1 capital of financial sector entities where the institution does not have a significant investment, net of short positions plus holdings of T2 capital of financial sector entities where the institution does not have a significant investment, net of short positions must equal minus the larger of these four worked out and 0 times holdings of T2 capital of financial sector entities where the institution does not have a significant investment, net of short positions:

  • Holdings of CET1 capital of financial sector entities where the institution does not have a significant investment, net of short positions
  • Holdings of AT1 capital of financial sector entities where the institution does not have a significant investment, net of short positions
  • Holdings of T2 capital of financial sector entities where the institution does not have a significant investment, net of short positions
  • Minus threshold non deductible of holdings in financial sector entities where an institution does not have a significant investment

All the values are in the amount column (0010).

The headline gives only the kind of check and the template, because the rule is too long to say in a headline. The plain words above say all of it.

How the Line4 Check report words itShow

Word for word as the report shows it when the rule fails.

C_01.00: (-) T2 instruments of financial sector entities where the institution does not have a significant investment × (C_04.00: Holdings of CET1 capital of financial sector entities where the institution does not have a significant investment, net of short positions + C_04.00: Holdings of AT1 capital of financial sector entities where the institution does not have a significant investment, net of short positions + C_04.00: Holdings of T2 capital of financial sector entities where the institution does not have a significant investment, net of short positions) = -the larger of C_04.00: Holdings of CET1 capital of financial sector entities where the institution does not have a significant investment, net of short positions + C_04.00: Holdings of AT1 capital of financial sector entities where the institution does not have a significant investment, net of short positions + C_04.00: Holdings of T2 capital of financial sector entities where the institution does not have a significant investment, net of short positions - C_04.00: Threshold non deductible of holdings in financial sector entities where an institution does not have a significant investment and 0 × C_04.00: Holdings of T2 capital of financial sector entities where the institution does not have a significant investment, net of short positions

What to do if your filing fails it

  1. 01Open the templates below and find the cells the rule reads.
  2. 02Work out both sides from your file, as the rule in plain words sets out, and compare them.
  3. 03EBA allows a small rounding difference, worked out from the decimals each value is reported with.
  4. 04It runs only when your filing indicators mark C 01.00 and C 04.00 as reported.
  5. 05This is a warning. It does not stop the filing on its own, but your authority may ask you to explain it.

The cells it reads

Capital adequacy - own funds definition (C 01.00)

Row

  • 0940(-) T2 instruments of financial sector entities where the institution does not have a significant investment

Column

  • 0010Amount

Capital adequacy - Memorandum items (C 04.00)

Rows

  • 0190Threshold non deductible of holdings in financial sector entities where an institution does not have a significant investment
  • 0230Holdings of CET1 capital of financial sector entities where the institution does not have a significant investment, net of short positions
  • 0300Holdings of AT1 capital of financial sector entities where the institution does not have a significant investment, net of short positions
  • 0370Holdings of T2 capital of financial sector entities where the institution does not have a significant investment, net of short positions

Column

  • 0010Amount
Show the rule as writtenShow

EBA's formula. Cells are written as {template, row, column, sheet}.

{C_01.00,r0940,c0010,} * ({C_04.00,r0230,c0010,} + {C_04.00,r0300,c0010,} + {C_04.00,r0370,c0010,}) = -(max({C_04.00,r0230,c0010,} + {C_04.00,r0300,c0010,} + {C_04.00,r0370,c0010,} - {C_04.00,r0190,c0010,},0)) * {C_04.00,r0370,c0010,}

Every COREP own funds rule, by template

Checks like this one, run at the point of submission, are the first step to real-time supervision.