![Amendments to banking capital requirements legislation [EU Legislation in Progress]](https://i0.wp.com/epthinktank.eu/wp-content/uploads/2023/02/EPRS-Briefing-739368-CRR-CRD-Amendments-FINAL.png?fit=1024%2C683&ssl=1)
Written by Issam Hallak (3rd edition, updated on 08.07.2024).
On 27 October 2021, the Commission tabled two interconnected proposals to amend the Capital Requirements Regulation (CRR) and the Capital Requirements Directive (CRD), which together form the EU prudential regulatory framework for banks. The aim of the proposals was to implement the final arrangements of the Basel Agreement and enhance the harmonisation of banking supervision in the EU. The main proposed amendments included i) introducing an ‘output floor’, i.e. a lower bound for minimum capital requirements calculated using banks’ own methods; ii) considering environmental, social and governance (ESG) aspects when conducting risk assessments; and iii) standardising the selection of board members and directors of credit institutions.
The co-legislators reached a provisional agreement on 29 June 2023, and the final acts were published in the Official Journal of the EU on 19 June 2024. The ‘output floor’ will be applied at the entity level and fully implemented over a transitional period. ESG risks will be considered part of the prudential framework, taking into account the EU’s carbon neutrality objective.
Versions
- July 2024: Amendments to banking capital requirements legislation (3rd edition)
| Proposal for amending Regulation (EU) No 575/2013 as regards requirements for credit risk, credit valuation adjustment risk, operational risk, market risk and the output floor; Proposal for amending Directive 2014/59/EU; amending Regulation (EU) No 575/2013 as regards requirements for credit risk, credit valuation adjustment risk, operational risk, market risk and the output floor |
| Committee responsible: | Economic and Monetary Affairs (ECON) | COM(2021) 663, 27.10.2021; COM(2021) 664, 27.10.2021 |
| Rapporteur: | Jonás Fernández (S&D, Spain) | 2021/0341(COD); 2021/0342(COD) |
| Shadow rapporteurs: | Othmar Karas (EPP, Austria), Erik Poulsen (Renew, Denmark) 2021/0341(COD) / Gilles Boyer (Renew, France) 2021/0342(COD), Ville Niinistö (Greens/EFA, Finland), Marco Zanni (ID, Italy), Johan Van Overtveldt (ECR, Belgium), Dimitrios Papadimoulis (The Left, Greece) | Ordinary legislative procedure (COD) (Parliament and Council on equal footing – formerly ‘co-decision’) |
| Procedure completed Regulation 2024/1623 OJ L, 2024/1623, 19.6.2024 Directive 2024/1619 OJ L, 2024/1619, 19.6.2024 |
Be the first to write a comment.