GIBC Comments on IASB EBA/ED/2023/5 - Financial Instruments with Characteristics of Equity

The German Banking Industry Committee (GBIC) welcomes the approach of maintaining, in principle, existing distinctions between equity and liabilities while simply providing clarification for a few key points. However, GBIC is particularly critical of the proposal to, when distinguishing between equity and liabilities, only take those sections of the contract into account that go above and beyond the statutory regulations. GBIC believes that this could lead to incorrect classification of financial instruments as equity or liabilities. GBIC is therefore calling for this proposal to be dropped.