Briefing - Amendments to banking capital requirements legislation - 08-07-2024
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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 proposBriefing - Amendments to banking capital requirements legislation - 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. Third edition. The 'EU Legislation in Progress' briefings are updated at key stages throughout the legislative procedure. Source : © European Union, 2024 - EP Read more