Home Banking issues Risk management Two revisions to the capital-requirements directive (CRD)  


31 december 2009

Two revisions to the capital-requirements directive (CRD)

In May 2009, the European Parliament adopted the first revision of the capital-requirements directive (CRD II).


This revision was foreshadowed in the original CRD, and provided for the inclusion of a number of recommendations relative to the supervision of pan-European groups, prudential treatment of securitisation, the control of major risks and the definition of hybrid capital. The text, published in the Official Journal of the EU in November 2009, must be transposed into each member state's national law by 31 October 2010, so that it can come into force by the end of 2010.

During the revision process, the FBF noted that the text was intended to contribute to reinforcing financial stability in Europe without hindering the financing of the economy, nor distorting competition. It supports progress on supervision and early moves aimed at harmonising the calculation of capital, which would be worthwhile pursuing. But it regrets that the regulation of major risks should involve the same treatment for different types of risk. Banks should not be treated in the same way as other counterparties, as this could lead to a reduction in interbank activity and a destabilisation of the markets.

In July 2009, the European Commission published another proposed revision of the CRD (CRD III), bearing on capital adequacy for trading and re-securitisation portfolios, disclosure requirements with respect to securitisation-related risk and compensation policies. The December European Council meeting approved modifications to the CRD proposed by the November Ecofin Council meeting, and asked member states to implement measures on the compensation of market professionals.

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