Capital Requirements Regulation and Directive
| European Union regulation | |
| Text with EEA relevance | |
| Title | on prudential requirements for credit institutions and investment firms |
|---|---|
| Made by | European Parliament and Council |
| Made under | of the TFEU. |
| Journal reference | OJ L 176, 27.6.2013, p. 1–337 |
| History | |
| Date made | 26 June 2013 |
| Implementation date | 27 June 2013 |
| Applies from |
1 January 2014, with the exception of:
|
| Preparative texts | |
| EESC opinion | |
| Other legislation | |
| Replaces | Directive 2006/48/EC and Directive 2006/49/EC (among others) |
| Amends | Regulation (EU) No 648/2012 |
| Current legislation | |
| European Union directive | |
| Text with EEA relevance | |
| Title | on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms |
|---|---|
| Made by | European Parliament and Council |
| Made under | of the TFEU. |
| Journal reference | OJ L 176, 27.6.2013, p. 338–436 |
| History | |
| Date made | 26 June 2013 |
| Implementation date | 18 July 2013 |
| Applies from | 31 December 2013 |
| Preparative texts | |
| EESC opinion | |
| Other legislation | |
| Replaces | Directive 2006/48/EC and Directive 2006/49/EC (among others) |
| Amends | Directive 2002/87/EC |
| Amended by | Directive 2014/17/EU and Directive 2014/59/EU |
| Current legislation | |
1 January 2014, with the exception of:
The Capital Requirements Regulation (EU) No. 575/2013 is an EU law that aims to decrease the likelihood that banks go insolvent. With the Credit Institutions Directive 2013 the Capital Requirements Regulation 2013 (CRR 2013) reflects Basel III rules on capital measurement and capital standards.
Previous rules were found in the Capital Requirements Directives (2006/48 and 2006/49). Together the new rules are sometimes referred to in the media as the “CRD IV” package. It applies from 1 January 2014. This is the third set of amendments to the original directives, following two earlier sets of revisions adopted by the Commission in 2008 (CRD II) and 2009 (CRD III).
The financial crisis has shown that losses in the financial sector can be extremely large when a downturn is preceded by a period of excessive credit growth. The financial crisis revealed vulnerabilities in the regulation and supervision of the banking system at European and global level. Institutions entered the crisis with capital of insufficient quantity and quality and, in order to safeguard financial stability, governments had to provide support to the banking sector in many countries.
This package of regulation implement Basel III in the European Union. Despite the fact that the new rules respect the balance and level of ambition of Basel III, there are two reasons why Basel III cannot simply be copy/pasted into EU legislation and, therefore, a faithful implementation of the Basel III framework shall be assessed having regard to the substance of the rules. First, Basel III is not a law. It is the latest configuration of an evolving set of internationally agreed standards developed by supervisors and central banks. That has to now go through a process of democratic control as it is transposed into EU and national law. Furthermore, while the Basel capital adequacy agreements apply to 'internationally active banks', in the EU it has applied to all banks (more than 8,300) as well as investment firms. This wide scope is necessary in the EU since banks authorised in one Member State can provide their services across the EU's single market (known as 'EU banking passport') and as such are more than likely to engage in cross-border business.
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