Company: BBVXF
Filing Date: 2025-02-21
Form Type: 20-F
Source: 0000842180-25-000010
Chunk: 63

Company: BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Filing Date: 2025-02-21
Form: 20-F
Item: Item 4
Chunk 63
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 the fourth quarter of 2025, provided that cyclical systemic risk remains at a standard level, it is expected to be raised by another 0.5% to 1% (to be applicable from October 1, 2026). 
Additionally, Article 104 of the CRD Directive, as implemented by Article 68 of Law 10/2014, and similarly Article 16 of Council Regulation (EU) No. 1024/2013 of October 15, 2013, conferring specific tasks on the ECB concerning policies relating to the prudential supervision of credit institutions (the “SSM Regulation”), also contemplates the possibility that the supervisory authorities may require credit institutions to meet capital requirements exceeding the “Pillar 1” minimum capital requirements and the “combined capital buffer requirement” by establishing “Pillar 2” capital requirements (which, with respect to other requirements, are above the “Pillar 1” requirements and below the “combined capital buffer requirement”).
Furthermore, the ECB is required, under Regulation (EU) No. 468/2014 of the ECB of April 16, 2014 establishing the framework for cooperation within the Single Supervisory Mechanism (“SSM”) between the ECB and national competent authorities and with national designated authorities (the “SSM Framework Regulation”), to carry out a SREP for the Bank and the Group at least on an annual basis.
On July 19, 2018, the EBA published its final guidelines intended to further enhance risk management by institutions and the convergence of supervision with respect to the SREP. These guidelines focus on stress testing, particularly to determine “Pillar 2” capital guidance and the level of interest rate risk. As of July 23, 2020, the EBA published further guidelines on the 2020 SREP in light of the crisis generated by COVID-19. Additionally, the EBA published further draft amended guidelines regarding the implementation of changes introduced by the CRD V Directive on March 18, 2022, repealing the EBA Guidelines of December 19, 2014 and the updated guidelines of July 19, 2018, with effect from January 1, 2023. 
In response to the COVID-19 pandemic, the ECB announced on March 12, 2020 that it would allow banks to partially use AT1 and Tier 2 instruments to meet the “Pillar 2” requirement, being this measure introduced