Credit institution
Banks and savings banks
"Credit institutions must meet the CET1 (4.5%), Tier 1 (6%) and total capital (8%) ratios of CRR Art. 92, plus the capital buffers and the additional Pillar 2 requirements set through the SREP."
Regulatory Capital and Minimum Capital Requirements in Spain
We advise financial institutions on meeting regulatory capital requirements: Basel III solvency ratios, CET1, Tier 1, Tier 2, capital buffers, CRR/CRD, SREP and prudential supervision by the Bank of Spain, the CNMV and the ECB.
Free consultation: regulatory capital
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- Minimum CET1 ratio
- 4.5%
- Total capital ratio
- 8%
- Capital conservation buffer
- 2.5%
- CRR Regulation
- Reg. 575/2013
Services
What our regulatory capital service includes
From analyzing solvency requirements to dealing with the supervisor: comprehensive regulatory capital advice for financial institutions.
Solvency
Capital requirements analysis
We assess your institution’s own funds requirements: CET1, Tier 1, total capital ratio, capital buffers (conservation, countercyclical, systemic), leverage ratio and SREP requirements. We identify gaps and plan the capitalization strategy.
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CET1Tier 1CRRBasel III
Authorization
Initial capital for authorization
We advise on determining and evidencing the minimum initial capital required for the authorization of credit institutions, investment firms, payment institutions, electronic money institutions and collective investment scheme management companies before the Bank of Spain and the CNMV.
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Investment firmsPayment institutionsEMIsFund managers
CRR III
Adapting to CRR III / CRD VI
The Banking Package (CRR III/CRD VI) brings the final Basel III reforms into Europe from January 2025. We help you assess the impact and adapt your capital structure.
Coming soon
Output floorSA-CR
SREP
Supervisory review and evaluation process (SREP)
We prepare your institution for the supervisor’s SREP: documentation, ICAAP, ILAAP, capital plans and dialogue with the Bank of Spain or the ECB.
Coming soon
ICAAPILAAP
AML
Prudential compliance and AML
Capital requirements go hand in hand with corporate governance, internal control and anti-money laundering obligations. An integrated prudential compliance framework.
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GovernanceAML
Reporting
Regulatory reporting (COREP)
Advice on preparing and reviewing prudential reporting (COREP): own funds templates, solvency ratios, leverage and large exposures.
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COREPPillar 3
Use cases
Every institution has different capital requirements
Bank, investment firm, payment institution, fund manager or fintech: the regulatory capital required depends on the type of institution, its size, complexity and risk profile.
Investment firm
Investment firms
"Since June 2021, the new IFR/IFD prudential regime has set specific capital requirements for investment firms based on K-factors: risk to client, risk to market and risk to the firm itself."
Payment institution
Payment institutions and electronic money institutions
"Payment institutions need minimum initial capital of between €20,000 and €125,000 depending on their services, plus ongoing own funds calculated under PSD2 method A, B, C or D."
Fund manager
Collective investment scheme management companies
"Management companies of collective investment schemes must maintain minimum initial capital and additional own funds based on the volume of assets under management, under the UCITS Directive and the AIFMD."
Risks
What happens if you breach regulatory capital requirements?
Breaching capital requirements can have severe consequences: operating restrictions, supervisory intervention and, in extreme cases, resolution of the institution.
Restrictions on distributions: if the institution does not meet the combined buffer requirement (CBR), automatic restrictions apply to dividend payments, share buybacks and AT1 coupon payments.
Supervisory measures: the supervisor may impose additional Pillar 2 requirements (P2R and P2G), require capital plans, restrict activities or require the divestment of risky assets.
Resolution or intervention: if the institution reaches the point of non-viability (PONV), resolution mechanisms are triggered: bail-in, sale of assets, bridge bank or orderly liquidation.
CRR Art. 924.5% / 6% / 8%
Minimum CET1, Tier 1 and total capital ratios that every credit institution must maintain at all times on its risk-weighted assets (RWAs).
CRR IIISince January 2025
The Banking Package introduces the output floor (72.5% of the standardized approach), new risk weights and requirements for crypto-assets and ESG that may affect capital ratios.
SREPPillar 2
The supervisory review process may result in additional capital requirements (P2R) above the Pillar 1 minimums, based on the individual assessment of each institution.
Need advice on regulatory capital?
We analyze your solvency requirements, identify capital gaps, plan your capitalization strategy and prepare you for dialogue with the supervisor. Regulatory capital without surprises.
Frequently asked questions
Regulatory capital: common questions
What is regulatory capital?
Regulatory capital is the minimum level of own funds that the supervisor requires financial institutions to hold to ensure their solvency and the stability of the financial system. It is calculated as a percentage of the institution’s risk-weighted assets (RWAs) and is structured in three tiers: CET1 (Common Equity Tier 1), AT1 (Additional Tier 1) and T2 (Tier 2).
The main legal framework is the Capital Requirements Regulation (CRR) (Regulation 575/2013) and the Capital Requirements Directive (CRD), which transpose the Basel III accords into European Union law.
What are the minimum capital ratios?
Minimum ratios (CRR Art. 92)
- CET1: 4.5% of risk-weighted assets.
- Tier 1 (CET1 + AT1): 6% of RWAs.
- Total capital (Tier 1 + Tier 2): 8% of RWAs.
- On top of these minimums come the capital buffers (conservation, countercyclical, systemic) and the Pillar 2 requirements set by the supervisor in the SREP.
What are capital buffers?
Capital buffers are additional requirements on top of the Pillar 1 minimums, and they must be met with CET1:
- Capital conservation buffer (CCB): an additional 2.5% of CET1. Mandatory for all institutions.
- Countercyclical capital buffer (CCyB): between 0% and 2.5%, set by the macroprudential authority according to the credit cycle.
- Buffer for systemically important institutions (G-SII / O-SII): between 1% and 3.5% for systemic institutions.
- Systemic risk buffer (SyRB): discretionary, for macroprudential or systemic risks.
What is the SREP?
The SREP (Supervisory Review and Evaluation Process) is the process through which the supervisor assesses the capital and liquidity adequacy of each institution individually. As a result of the SREP, the supervisor may impose:
- P2R (Pillar 2 Requirement): mandatory additional capital requirements that must be met at all times.
- P2G (Pillar 2 Guidance): guidance on the level of capital the institution should hold above its mandatory requirements.
What changes with CRR III and CRD VI?
The Banking Package (CRR III/CRD VI), adopted in 2024 and applicable since January 2025, brings the final Basel III reforms into Europe. The main changes include:
- Output floor: limits, at 72.5%, the reduction in RWAs that internal models (IRB) can produce compared with the standardized approach.
- A revised standardized approach for credit risk (SA-CR), with greater granularity and risk sensitivity.
- A new treatment of operational risk with a single standardized approach.
- Requirements on crypto-asset exposures and ESG risks.
What capital does an investment firm need?
Since June 2021, investment firms have been governed by the Investment Firms Regulation (IFR) (2019/2033) and the Investment Firms Directive (IFD) (2019/2034), which set up a dedicated prudential regime. The minimum capital depends on the type and size of the investment firm and is calculated as the highest of three amounts: the minimum initial capital, one quarter of the previous year’s fixed overheads and the requirement based on K-factors (risk to client, risk to market and risk to the firm).
What is the leverage ratio?
The leverage ratio is a measure that complements risk-based capital ratios. It is calculated as Tier 1 capital divided by the total exposure measure (on- and off-balance-sheet assets). CRR II set a mandatory minimum of 3% for all institutions. Global systemically important institutions (G-SIIs) must also meet an additional leverage ratio buffer.
What is MREL/TLAC?
MREL (Minimum Requirement for own funds and Eligible Liabilities) is the minimum requirement for own funds and eligible liabilities that institutions must maintain to ensure that, in a resolution, there is enough capacity to absorb losses and recapitalize. For global systemically important institutions (G-SIIs), the equivalent FSB standard is TLAC, which has been incorporated into the CRR as a Pillar 1 requirement.
Operational guide
Practical guide to regulatory capital
Regulatory capital is built on three pillars: minimum requirements, supervisory review and market discipline. These are the key concepts every institution must master.
Minimum capital requirements
The CET1 (4.5%), Tier 1 (6%) and total capital (8%) ratios of CRR Art. 92 are the foundations of the system. They are calculated on risk-weighted assets for credit, market and operational risk.
Supervisory review (SREP)
The supervisor individually assesses each institution’s capital and liquidity adequacy. It may impose additional requirements (P2R) and guidance (P2G) above the Pillar 1 minimums.
Market discipline and disclosure
Institutions must publish information on their solvency, risk management and exposures (Pillar 3, COREP). Transparency allows the market to assess the institution’s soundness.
Structure of regulatory capital: from highest to lowest quality
- CET1 (Common Equity Tier 1): ordinary shares, reserves, retained earnings. The highest-quality capital, with the greatest loss-absorbing capacity.
- AT1 (Additional Tier 1): perpetual loss-absorbing instruments (CoCos, contingent convertible bonds). No maturity, with a conversion or write-down clause.
- T2 (Tier 2): subordinated debt with a minimum maturity of 5 years. Loss-absorbing capacity in resolution (gone concern).
- Capital conservation buffer (CCB): an additional 2.5% of CET1, mandatory for all institutions.
- Countercyclical buffer (CCyB): 0%–2.5% of CET1, varying with the credit cycle.
- Systemic buffer (G-SII/O-SII): 1%–3.5% for systemically important institutions.
- Pillar 2 Requirement (P2R): additional requirement set through the SREP, specific to each institution.
- Pillar 2 Guidance (P2G): non-binding guidance on the desirable level of capital.
- Leverage ratio: minimum 3% of Tier 1 over total exposure (non-risk-based backstop).
- MREL/TLAC: total loss-absorbing and recapitalization capacity in resolution.
If you need help with your capital planning, see our securities market services or request a free consultation.
BOE and EUR-Lex data
Minimum capital for each financial license in Spain
How much initial capital the law requires to obtain each license, and in which article. This is the minimum for authorization: afterwards, each institution must maintain the own funds set by its prudential regime.
Data checked against the BOE consolidated texts and EUR-Lex on October 21, 2026. Based on data from the Agencia Estatal Boletín Oficial del Estado (Spanish Official State Gazette). The descriptions are summaries: the exact figure and its conditions are in each linked article.
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Indicative result, calculated with the figures in the table. It does not take into account the requirements of each specific case. If you would like us to review it against your business plan, write to us.
CAPITAL ADEQUACY CONSOLE
Regulatory capital requirements dashboard by type of institution
Capital requirements vary significantly depending on the type of financial institution, its size and the applicable regulatory framework.
Capital framework by type of institution
Each financial institution is governed by a different prudential framework with specific capital requirements.
Requirement
Bank
Investment firm
Payment institution
Framework
CRR / CRDBasel III
IFR / IFDK-factors
PSD2Fixed capital
Min. CET1
4.5%+ buffers + P2R
VariableK-factors
N/AFixed capital
SREP
YesECB / Bank of Spain
YesCNMV
LimitedBank of Spain
Glossary
Key regulatory capital concepts
If you manage or advise a financial institution, these are the regulatory capital terms you need to master.
CET1Capital
Common Equity Tier 1
The highest tier of capital: ordinary shares, share premium, reserves and retained earnings. It is the highest-quality capital, with full loss-absorbing capacity.
CRR minimum: 4.5% of RWAs (Art. 92).
RWARisk
Risk-Weighted Assets
A measure of risk exposure that weights each asset according to its level of risk. It is the basis for calculating capital ratios. RWAs are calculated for credit, market and operational risk.
Known in Spanish as APR (activos ponderados por riesgo).
CRRLegislation
Capital Requirements Regulation
Regulation (EU) 575/2013, which sets the prudential capital, liquidity and leverage requirements for credit institutions and investment firms in the EU. Directly applicable.
Amended by CRR II (2019) and CRR III (2024).
CoCoAT1
Contingent Convertible Bond
A contingent convertible bond that converts into shares or is written down when the CET1 ratio falls below a predetermined threshold. An AT1 instrument with going-concern loss-absorbing capacity.
Trigger: typically CET1 < 5.125% or 7%.
ICAAPPillar 2
Internal Capital Adequacy Assessment Process
The internal process for assessing capital adequacy. The institution must show the supervisor that it has enough capital to cover all material risks, including those not covered by Pillar 1.
A key SREP document.
Output floorCRR III
Capital floor for internal models
Limits, at 72.5%, the reduction in RWAs that internal models (IRB) can produce compared with the standardized approach. It prevents internal models from underestimating risk and ensures a minimum level of capital.
Phased in from 2025 to 2030.
Bail-inResolution
Internal recapitalization
A resolution mechanism under which the institution’s creditors and shareholders absorb losses before taxpayers do. MREL/TLAC ensures there is enough capacity for the bail-in.
BRRD: defined order of priority among creditors.
K-factorIFR
Risk factor for investment firms
A risk metric specific to the IFR regime for investment firms. K-factors measure risk to client (RtC), risk to market (RtM) and risk to the firm (RtF), and determine capital requirements.
Applicable since June 2021 (Reg. 2019/2033).
COREPReporting
Common Reporting Framework
The common prudential reporting framework that institutions must periodically submit to the supervisor: own funds templates, solvency ratios, leverage, liquidity and large exposures.
Managed by the EBA.
Contact
Book a call
Tell us about your situation and we will explain how we can help you with your regulatory capital requirements.
Regulatory capital: European and Spanish legal framework
Regulatory capital is the minimum level of own funds that financial institutions must hold to ensure their solvency and the stability of the financial system. Its legal framework originates in the Basel Accords of the Basel Committee on Banking Supervision (BCBS) and is transposed in Europe through the Capital Requirements Regulation (CRR) (575/2013) and the Capital Requirements Directive (CRD), which together form the prudential regulatory package for credit institutions and investment firms.
Basel III and its European transposition
After the 2008 financial crisis, the BCBS adopted the Basel III framework to strengthen capital requirements, introduce liquidity measures (LCR, NSFR) and establish a leverage ratio. In Europe, this framework was implemented through CRD IV/CRR (2013), updated by CRR II/CRD V (2019) and finally by the CRR III/CRD VI Banking Package (2024), which introduces the final Basel III reforms, applicable from January 2025.
Structure of regulatory capital
Regulatory capital is structured in three tiers of decreasing quality: CET1 (Common Equity Tier 1, made up of ordinary shares and reserves), AT1 (Additional Tier 1, such as CoCos) and T2 (Tier 2, such as subordinated debt). The minimum ratios set by Article 92 of the CRR are: CET1 of 4.5%, Tier 1 of 6% and total capital of 8% of risk-weighted assets.
Prudential supervision in Spain
In Spain, prudential supervision of credit institutions is the responsibility of the Bank of Spain and, for significant institutions, of the European Central Bank (ECB) within the Single Supervisory Mechanism (SSM). Investment firms (ESIs) are supervised by the CNMV. The SREP allows the supervisor to impose additional Pillar 2 capital requirements tailored to each institution’s individual risk profile.
Related services
Financial regulation
Official sources
Key legislation, linked to the official text:
- Royal Decree 813/2023 of November 8 on the legal regime of investment firms and other entities providing investment servicesBOE · consolidated text
- Royal Decree-law 19/2018 of November 23 on payment services and other urgent financial measuresBOE · consolidated text
- Royal Decree 84/2015 of February 13 implementing Law 10/2014 of June 26 on the organization, supervision and solvency of credit institutionsBOE · consolidated text
Legislation and links reviewed in .