Highlights European systemically important banks (or EU-GSIBs1.) continue improving their capital and leverage positions during 3Q15, in compliance with CRDIV. The CRDIV rules comprise minimum requirements on capital adequacy, liquidity and leverage positions, which seek to enhance the soundness of bank’s balance sheets. Among the main findings of this report are: EU GSIBs increased their end-point Common Equity Tier 1 Capital ratio (CET1 ratio) to 11.5% in 3Q15, from 11.4% in 2Q15 and 10% in 4Q13. End-point Tier 1 ratios increased in the third quarter of the year to 12.7%, from 12.5% in 2Q15 and 10.7% in 4Q13. Leverage ratios also continue improving in 3Q15, with a simple average ratio of 4.6% in 3Q15 calculated on an end-point basis, from 4.5% in 2Q15 and 3.8% in 4Q13. The findings of this report are consistent with the observed increase in aggregate capital raising since 2009 (see graph in left panel). Since the 2009 crisis, EU banks have raised around €318bn in fresh capital from the markets, of which €254bn is in equity and €64bn in CoCos and other convertible debt (in total about 2.3% of EU28 GDP at current prices). This estimate, however, does not take into account capital raised through internal generation (retained earnings) and balance sheet restructuring.

Highlights European leveraged finance issuance (leveraged loans and high yield bonds) decreased in 3Q’15 to €23.7 billion, a 56.9% decrease from €55.0 billion quarter-over-quarter (q-o-q) and a 39.3% decrease from €39.0 billion in 3Q’14. The quarterly decrease stems from the large fall in high yield bond issuance, which decreased by 71.2% in the third quarter of 2015 while the leveraged loan issuance decreased by 40.0%; the high yield share of the leveraged finance market decreased to 36.2%, down from 54.2% in 2Q’15. Market and Economic Environment According to the October 2015 European Central Bank lending survey, credit standards for loans to enterprises, consumer credit and loans to households other than for house purchase eased in net terms while credit standards on loans to households for house purchase tightened in the third quarter of 2015, continuing to support the re-covery of loan growth. In 3Q’15, euro area banks report-ed a further net easing of credit standards on loans to en-terprises for the sixth consecutive quarter, driven in par-ticular by banks’ competition and risk perceptions. Look-ing ahead to the fourth quarter of 2015, euro area banks expect a further net easing of credit standards on loans to enterprises. Across firm size, credit standards were eased mainly on loans to small and medium-sized enterprises (SMEs) and were broadly unchanged for large firms. Credit standards on loans to enterprises improved in Italy, remained unchanged in Germany, Spain and the Nether-lands and tightened in France. Net demand for loans to enterprises continued to increase in 3Q’15 mostly due to favorably low level of interest rates. The net percentage of banks reporting an increase in demand for loans to enterprises was 16%, up from 13% in the previous quarter. Banks reported a net increase in the demand for housing loans as well. The net percentage of banks reporting an increase in demand for housing loans in the third quarter was 33%, down from 49% in the previous quarter.

Highlights Equity underwriting accumulated a total of EUR 140.4 bn year-to-date (YtD) in total proceeds, a marginal decrease of 1.1% from the value observed in the first three quarters of 2014 (EUR 141.9 bn). Equity underwriting encompasses Initial Public Offerings (IPOs), convertible securities and follow-on offerings. Mergers and Acquisitions of European target or acquiring companies accumulated EUR 587 bn YtD in deal value, a decrease of 8.6% from the value observed in the first three quarters of 2014 (EUR 643 bn). Equity trading activity in European MTS and exchanges accumulated a total of EUR 10 tn YtD in turnover value, a substantial increase from the observed in the first three quarters of 2014 (EUR 7.3 tn). Market capitalisation of European shares increased 2.7% YtD in 3Q15, standing at EUR 11.3 tn.

In Q3 2015, EUR 56.3 billion of securitised product was issued in Europe1, an increase of 12.4% from Q2 2015 (EUR 50.1 bn) and an increase of 50.9% from Q3 2014 (EUR 37.3 bn)2Of this, EUR 17.3 billion was placed, representing 30.7%, compared to EUR 28.3 billion placed in Q2 2015 (representing 56.5% of 50.1 EUR bn) and EUR 19.6 billion placed in Q3 2014 (representing 52.2% of 37.3 EUR bn)In Q3 2015, UK RMBS led placed totals followed by Pan European CLOs and German Auto: UK RMBS decreased from 4.8 EUR bn in Q2 2015 to 3.8 EUR bn in Q3 2015; Pan European CLOs decreased from 4.5 EUR bn in Q2 2015 to 2.5 EUR bn in Q3 2015; German Auto decreased from 5.5 EUR bn in Q2 2015 to 2.2 EUR bn in Q3 2015.

Market Environment According to Eurostat, GDP rose by 0.4% QoQ in the Euro Area and in the EU 28 in the second quarter of 2015, down slightly from the 0.5% QoQ growth in the prior quarter. According to the July 2015 European Central Bank lending survey, credit standards for loans to enterprises, consumer credit and loans to households eased in net terms in the second quarter of 2015, supporting the recovery of loan growth. In Q2 15, euro area banks reported a net easing of credit standards on loans to enterprises for the fifth consecutive quarter, driven in particular by banks’ competition and cost of funds. Across firm size, credit standards were eased on loans to both large firms and small and medium-sized enterprises (SMEs). Net demand for loans to enterprises improved significantly in Q2 15 mostly due to general level of interest rates and fixed investment. The net percentage of banks reporting an increase in demand for loans to enterprises was 13%, up from 1% in the previous quarter. Banks reported a further strong net increase in the demand for housing loans as well.

Highlights European leveraged finance issuance (leveraged loans and high yield bonds) decreased in 2Q’15 to €55.0 billion, a 4.8% decrease quarter-over-quarter (q-o-q) and a 41.2% decrease from a record setting €93.5 billion in 2Q’14. The quarterly decrease stems from the large fall in high yield bond issuance, which decreased by 15.6% in the second quarter of 2015 while the leveraged loan issuance in-creased by 12.4%; the high yield share of the leveraged fi-nance market decreased to 54.2%, down from 61.2% in 1Q’15. Market and Economic Environment According to the July 2015 European Central Bank lend-ing survey, credit standards for loans to enterprises, con-sumer credit and loans to households, both for and other than for house purchase, eased in net terms in the second quarter of 2015, supporting the recovery of loan growth. In 2Q’15, euro area banks reported a net easing of credit standards on loans to enterprises for the fifth consecutive quarter, driven in particular by banks’ competition and cost of funds. Looking ahead to the third quarter of 2015, euro area banks expect no further net easing of credit standards on loans to enterprises. Across firm size, credit standards were eased on loans to both large firms and small and medium-sized enterprises (SMEs). Credit stand-ards on loans to enterprises continued to ease in France and, more particularly, Italy. They were unchanged in net terms in Spain and in the Netherlands, while banks in Germany reported a marginal net tightening in standards. Net demand for loans to enterprises improved significant-ly in 2Q’15 mostly due to general level of interest rates and fixed investment. The net percentage of banks re-porting an increase in demand for loans to enterprises was 13%, up from 1% in the previous quarter. Banks reported a further strong net increase in the demand for housing loans as well. The net percentage of banks reporting an increase in demand for housing loans in the second quar-ter was 49%, up from 30% in the previous quarter.

Highlights This report provides an update on the progress achieved by EU GSIBs against the rules set out in the CRDIV leg-islation. The report also illustrates the recent performance of the debt and contingent convertibles (CoCo) markets for banks in Europe. Most prudential data publications and statistical sources compile information that is not comparable or is pub-lished with a substantial delay. This report addresses the existing data gap by publishing comparable and consistent prudential statistics of EU GSIBs on a timely basis. For the preparation of this report, a dataset with compa-rable prudential ratios was compiled from public sources, illustrating the continued progress against the CRDIV capital and leverage requirements by the 14 EU GSIBs1. These banks together accounted for €18.3tn in assets in 2014 (€18.4 in June 2015), or approximately 55% of total assets held by banks in the EU. For some data points, no-tably CoCos, this report provides data on all European banks rather than just EU GSIBs.

In Q2 2015, EUR 46.6 billion of securitised product was issued in Europe1, an increase of 33.5% from Q1 2015 (EUR 34.9 bn) and a decrease of 53.2% from Q2 2014 (EUR 99.5 bn)2Of this, EUR 25.3 billion was placed, representing 54.3%, compared to EUR 19.7 billion placed in Q1 2015 (representing 56.4% of 34.9 EUR bn) and EUR 19.6 billion placed in Q2 2014 (representing 19.7% of 99.5 EUR bn)In Q2 2015, UK RMBS led placed totals followed by Pan European CLOs and German Auto:UK RMBS decreased from 5.4 EUR bn in Q1 2015 to 4.8 EUR bn in Q2 2015;Pan European CLOs increased from 3.2 EUR bn in Q1 2015 to 4.5 EUR bn in Q2 2015;German Auto increased from 2.1 EUR bn in Q1 2015 to 2.8 EUR bn in Q2 2015.

Market Environment According to Eurostat, GDP rose by 0.4% q/q in the Euro Area and the EU28 in the first quarter of 2015. According to the April 2015 European Central Bank lending survey, banks continued to report easing of lending standards in the first quarter. Lending standards eased to a greater extent for small-and-medium enterprises (SMEs) than for large enterprises. Short-term loans standards also continued to ease to a greater extent than longterm loan standards. Competition between banks was far and away the strongest factor in easing lending standards, although bank liquidity positions and market financing contributed to a lesser extent. Net loan demand also rose in the first quarter, albeit to a lesser degree than in the prior quarter. The need for working capital and debt restructuring were the most influential drivers of greater demand, constrained by debt issuance and internal financing.

Highlights European leveraged finance issuance (leveraged loans and high yield bonds) more than doubled in 1Q’15 to €57.7 billion, a 112.8% increase quarter-over-quarter (q-o-q) and a 25.2% increase year-over-year (y-o-y). The increase q-o-q stems from the large rise in high yield bond issuance, which more than quadrupled in the first quarter of 2015; the high yield share of the leveraged finance market in-creased to 61.2%, up from 30.4% in 4Q’14. Market and Economic Environment According to the April 2015 European Central Bank lend-ing survey, credit standards for loans to enterprises, con-sumer credit and loans to households other than for house purchase continued to ease in net terms in the first quarter of 2015, while the credit standards for loans to households for house purchase tightened slightly in net terms. Despite the easing in most categories during the quarter the European Central Bank stated that the level of credit standards is still relatively tight in historical terms. In 1Q’15, euro area banks reported a net easing of credit standards on loans to enterprises for the fourth consecu-tive quarter driven in particular by banks’ cost of funds and balance sheet constraints and competition. Across firm size, credit standards were eased on loans to both large firms and small and medium-sized enterprises (SMEs). Credit standards on loans to enterprises have im-proved in all large euro area countries except for Spain, in particular in Italy, and switched from a net tightening to a net easing in the Netherlands. Net loan demand continued to be positive for loans to en-terprises, but fell back from the high level reported in the fourth quarter of 2014. Net demand for loans to enter-prises continued to improve, however at a slower pace. The net increase in demand was 6% in 1Q’15, down from 18% in the previous quarter. Net demand for housing loans continued to increase at a fast pace (29%, up from 24% in the previous quarter), while it remained broadly stable for consumer credit (13%, after 14%).