AFME is pleased to share the Prudential Data Report for the fourth quarter of 2025. The report provides updated data on European G-SIBs’ prudential capital, leverage, and liquidity positions, and illustrates the performance of banks’ debt and contingent convertible (CoCo) securities.
Among the main findings of this report:
Capital and liquidity buffers remain strong
- The end‑point CET1 ratio of European G‑SIBs reached 14.5% in Q4 2025, up 30 bps year‑on‑year and returning to the peak levels last observed in 2021.
- The Leverage Ratio reported by EU GSIBs in Q4 2025 was 4.4%, in line with the level observed at the end of 2024. The average leverage ratio for UK GSIBs increased by 10bps QoQ, closing the year at 4.6.
- Liquidity coverage ratios stayed well above regulatory minimums, at 145.6% on average.
- TLAC capital covered 32.4% of RWAs and 9.6% of exposure measure. This represented a 40bps QoQ increase from 32% of RWAs and a 20bps increase from 9.4% of the exposure measure.
High AT1 bond issuance in 2025 supported by lower spreads
- In 2025 FY, a total of €33.85bn in AT1 capital was issued, a 50.6% increase YoY from 2024 (€22.48bn)
- European AT1 option-adjusted spreads (OAS) surged to 417bps in early April 2025 following the US tariff announcement that briefly disrupted credit markets. However, spreads steadily tightened throughout the year. By the end of 2025, AT1 risk premia had declined to 2.9%.
Countercyclical Capital Policy (Analytical Box, page 22)
The Analytical Box of page 22 reviews how cyclical risks are addressed across major banking jurisdictions (EU, UK, Canada, and the US).
- EU: CCyB use is uneven across Member States, with some but not all countries implementing positive neutral rates. We find evidence that P2R/P2G supervisory tools adjust cyclically, resulting in overlapping capital tools for countercyclical risks (CCyB, P2R and P2G).
- UK: Operates with a high positive neutral CCyB (2%), among the highest globally for countries that have a positive neutral framework. We find evidence that stress test scenarios also exhibit cyclicality, suggesting that countercyclicality is de-facto delivered through multiple parts of the framework (CCyB and P2).
- United States: While the CCyB remains at zero, we find evidence that the the Stress Capital Buffer (SCB) adjusts with the business cycle, effectively delivering countercyclical capital via stress‑based requirements.
- Canada: CCyB set at zero. Cyclical risks are managed through the Domestic Stability Buffer (DSB), which varies with macro‑financial and business cycle conditions.
- This cross‑jurisdictional analysis is particularly timely as EU and UK authorities begin reviews of their capital frameworks. Further detail on the EU approach is discussed in AFME’s capital stack report (here).