The Council of the European Union has adopted a directive and a regulation amending the EU’s rules on capital requirements for banks and investment firms.
Adoption of the CRD4 legislation follows agreement reached with the European Parliament at first reading on 28 February, and subsequent approval by the Permanent Representatives Committee, on behalf of the Council, on 27 March.
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The proposals set out to amend and replace existing capital requirement directives by two new legislative instruments: a regulation establishing prudential requirements that institutions need to respect, and a directive governing access to deposit-taking activities.
They are aimed at transposing into EU law an international agreement endorsed by the G20 in November 2010. The Basel III agreement, concluded by the Basel Committee on Banking Supervision, strengthens bank capital requirements, introduces a mandatory capital conservation buffer and a discretionary countercyclical buffer, and foresees a framework for new regulatory requirements on liquidity and leverage, as well as additional capital surcharges for systemically important institutions.
The new rules will apply from 1 January 2014.
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By GlobalData
