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Capital Requirements Regulation 2013

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548:", which aims to provide a single set of harmonised prudential rules which institutions throughout the EU must respect. The term Single Rulebook was coined in 2009 by the European Council in order to refer to the aim of a unified regulatory framework for the EU financial sector that would complete the single market in financial services. This will ensure uniform application of Basel III in all Member States, it will close regulatory loopholes and will thus contribute to a more effective functioning of the Internal Market. The new rules remove a large number of national options and discretions from the CRD, and allow Member States to apply stricter requirements only where these are justified by national circumstances, needed on financial stability grounds or because of a bank's specific risk profile. 415:
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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law, the regulation is directly applicable, which means that it creates law that takes immediate effect in all Member States in the same way as a national instrument, without any further action on the part of the national authorities. This removes the major sources of national divergences. It also makes the regulatory process faster and makes it easier to react to change market conditions. It increases transparency, as one rule as written in the regulation will apply across the single market. A regulation is subject to the same political decision making process as a directive at European level, ensuring full democratic control.
210: 43: 75: 242: 383:(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). 414:
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
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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
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The European Council also recommends that a European System of Financial Supervisors, comprising three new European Supervisory Authorities, be established aimed at upgrading the quality and consistency of national supervision, strengthening oversight of cross-border groups through the setting up of
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CRD IV strengthens the requirements with regard to corporate governance arrangements and processes and introduces new rules aimed at increasing the effectiveness of risk oversight by Boards, improving the status of the risk management function and ensuring effective monitoring by supervisors of risk
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Within this framework the previous CRD was divided into two legislative instruments: a directive governing the access to deposit-taking activities and a regulation establishing the prudential requirements institutions need to respect. While Member States have transposed the directive into national
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The original Commission proposal followed the timeline as agreed in the Basel Committee and in the framework of the G20: application of the new legislation as from 1 January 2013, and full implementation on 1 January 2019, in line with the international commitments. Given the detailed discussions
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Enhanced transparency. CRD IV improves transparency regarding the activities of banks and investment funds in different countries, in particular as regards profits, taxes and subsidies in different jurisdictions. This is considered essential for regaining the trust of EU citizens in the financial
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In implementing the Basel III agreement within the EU, capital, liquidity and the leverage ratio were considered, covering the whole balance sheet of the banks. In addition to Basel III implementation, the package introduces a number of important changes to the banking regulatory framework. The
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The remuneration framework has been further strengthened with regard to the requirements for the relationship between the variable (or bonus) component of remuneration and the fixed component (or salary) in order to tackle excessive risk taking. For performance from 1 January 2014 onwards, the
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by requiring that all banks' investment decisions are based not only on ratings but also on their own internal credit opinion; and, that banks with a material number of exposures in a given portfolio develop internal ratings for that portfolio instead of relying on external ratings for the
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during trilogues and their impact on the length of the legislative process, the new legislation was published on 27 June 2013 and fully entered into force on 17 July 2013. Institutions were required to apply the new rules from 1 January 2014, with full implementation on 1 January 2019.
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Diversity in board composition should contribute to effective risk oversight by boards, providing for a broader range of views and opinion and therefore avoiding the phenomenon of group think. CRD IV therefore introduces a number of requirements, in particular as regards
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the provisions of this Regulation that require the ESAs to submit to the Commission draft technical standards and the provisions of this Regulation that empower the Commission to adopt delegated acts or implementing acts, which shall apply from 31 December
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variable component of the total remuneration shall not exceed 100% of the fixed component of the total remuneration of material risk takers. Exceptionally, and under certain conditions, shareholder can increase this maximum ratio to 200%.
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of insufficient quantity and quality and, in order to safeguard financial stability, governments had to provide support to the banking sector in many countries.
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on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms
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Finally, the new rules seek to reduce to the extent possible reliance by credit institutions on
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Article 8(3), Article 21 and Article 451(1), which shall apply from 1 January 2015;
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on prudential requirements for credit institutions and investment firms
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Exercise of freedom of establishment and free movement of services
702:"Capital Requirements - CRD IV/CRR – Frequently Asked Questions" 361: 778:
applicable to all financial institutions in the Single Market.
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the Capital Requirements Regulation 2013 (CRR 2013) reflects
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Directive 2006/48/EC and Directive 2006/49/EC (among others)
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Directive 2006/48/EC and Directive 2006/49/EC (among others)
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Capital requirements regulation and directive – CRR/CRD IV
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Article 413(1), which shall apply from 1 January 2016;
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rules on capital measurement and capital standards.
430:(Strong links with national law, less prescriptive) 364:that aims to decrease the likelihood that banks go 496: 854: 783: 342:Directive 2014/17/EU and Directive 2014/59/EU 544:The main addition in the Regulation is the " 541:calculation of their capital requirements. 746: 774:supervisory colleges and establishing a 447:Access to taking up/pursuit of business 124:1 January 2014, with the exception of: 855: 696: 694: 692: 690: 688: 686: 720: 502:following is added to the Directive: 683: 560: 490:Disclosure requirements (Pillar 3) 13: 660:Credit Institutions Directive 2013 370:Credit Institutions Directive 2013 14: 899: 841: 532:Other systemic institution buffer 379:Previous rules were found in the 208: 41: 665:Capital Requirements Directives 381:Capital Requirements Directives 355:Capital Requirements Regulation 262:OJ L 176, 27.6.2013, p. 338–436 808: 497:European addition to Basel III 1: 878:Banking in the European Union 676: 94:OJ L 176, 27.6.2013, p. 1–337 386: 7: 653: 551: 403: 311:OJ C 68, 6.3.2012, p. 39–44 175:Regulation (EU) No 648/2012 10: 904: 873:2013 in the European Union 863:European Union regulations 824:European Banking Authority 407: 776:European single rule book 763:. 18 June 2009. p. 8 474:Counterparty credit risk 346: 338: 330: 322: 317: 302: 297: 289: 281: 273: 268: 253: 238: 224: 216: 207: 198: 191: 179: 171: 163: 158: 153:OJ C 68, 6.3.2012, p. 39. 145: 140: 120: 112: 104: 99: 86: 71: 57: 49: 40: 31: 26:European Union regulation 24: 193:European Union directive 538:external credit ratings 463:Prudential supervision 820:Regulation and policy 816:"The Single Rulebook" 479:Corporate governance 334:Directive 2002/87/EC 187:Directive 2013/36/EU 888:Capital requirement 732:European Commission 706:European Commission 646:Conservation buffer 347:Current legislation 282:Implementation date 229:European Parliament 188: 180:Current legislation 113:Implementation date 62:European Parliament 21: 20:Regulation 575/2013 734:. 27 November 2015 667:, on previous laws 186: 19: 791:"Single rulebook" 494: 493: 442: 431: 358:(EU) No. 575/2013 351: 350: 318:Other legislation 313: 298:Preparative texts 263: 184: 183: 159:Other legislation 141:Preparative texts 895: 835: 834: 832: 830: 812: 806: 805: 803: 801: 795:European Council 787: 781: 780: 770: 768: 761:European Council 758: 750: 744: 743: 741: 739: 724: 718: 717: 715: 713: 698: 644: 634: 626: 618: 561:Capital phase-in 482:Large exposures 436: 429: 422: 421: 393:financial crisis 309: 293:31 December 2013 261: 212: 211: 189: 185: 45: 44: 22: 18: 903: 902: 898: 897: 896: 894: 893: 892: 883:Bank regulation 853: 852: 844: 839: 838: 828: 826: 814: 813: 809: 799: 797: 789: 788: 784: 766: 764: 756: 752: 751: 747: 737: 735: 726: 725: 721: 711: 709: 700: 699: 684: 679: 656: 651: 650: 642: 632: 624: 616: 612: 611: 610: 607: 604: 601: 598: 595: 592: 588: 587: 584: 581: 578: 575: 572: 565: 563: 554: 546:Single Rulebook 499: 471:Capital buffers 439:single rulebook 435: 428: 412: 406: 389: 209: 42: 17: 12: 11: 5: 901: 891: 890: 885: 880: 875: 870: 865: 851: 850: 843: 842:External links 840: 837: 836: 807: 782: 745: 719: 708:. 12 July 2013 681: 680: 678: 675: 674: 673: 668: 662: 655: 652: 649: 648: 640: 630: 622: 613: 608: 605: 602: 599: 596: 593: 590: 589: 585: 582: 579: 576: 573: 570: 569: 568: 567: 562: 559: 553: 550: 534: 533: 530: 526:Systemic risk 524: 520: 517:gender balance 512: 508: 498: 495: 492: 491: 488: 484: 483: 480: 476: 475: 472: 468: 467: 464: 460: 459: 456: 452: 451: 448: 444: 443: 432: 408:Main article: 405: 402: 388: 385: 349: 348: 344: 343: 340: 336: 335: 332: 328: 327: 324: 320: 319: 315: 314: 307: 300: 299: 295: 294: 291: 287: 286: 283: 279: 278: 275: 271: 270: 266: 265: 258: 251: 250: 240: 236: 235: 226: 222: 221: 218: 214: 213: 205: 204: 196: 195: 182: 181: 177: 176: 173: 169: 168: 165: 161: 160: 156: 155: 150: 143: 142: 138: 137: 136: 135: 131: 128: 122: 118: 117: 114: 110: 109: 106: 102: 101: 97: 96: 91: 84: 83: 73: 69: 68: 59: 55: 54: 51: 47: 46: 38: 37: 29: 28: 16:EU banking law 15: 9: 6: 4: 3: 2: 900: 889: 886: 884: 881: 879: 876: 874: 871: 869: 866: 864: 861: 860: 858: 849: 846: 845: 825: 821: 817: 811: 796: 792: 786: 779: 777: 762: 755: 749: 733: 729: 723: 707: 703: 697: 695: 693: 691: 689: 687: 682: 672: 671:Banking union 669: 666: 663: 661: 658: 657: 647: 641: 638: 631: 629: 623: 621: 615: 614: 566: 558: 549: 547: 542: 539: 531: 529: 525: 521: 518: 513: 509: 505: 504: 503: 489: 486: 485: 481: 478: 477: 473: 470: 469: 465: 462: 461: 457: 454: 453: 449: 446: 445: 440: 433: 427: 424: 423: 420: 416: 411: 401: 399: 394: 384: 382: 377: 375: 371: 367: 363: 359: 356: 345: 341: 337: 333: 329: 325: 321: 316: 312: 308: 305: 301: 296: 292: 288: 284: 280: 276: 272: 267: 264: 259: 256: 252: 248: 244: 243:Article 53(1) 241: 237: 234: 230: 227: 223: 219: 215: 206: 202: 197: 194: 190: 178: 174: 170: 166: 162: 157: 154: 151: 148: 144: 139: 132: 129: 126: 125: 123: 119: 115: 111: 107: 103: 98: 95: 92: 89: 85: 81: 77: 74: 70: 67: 63: 60: 56: 52: 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With the 76:Article 114 857:Categories 738:6 December 712:6 December 677:References 458:Liquidity 339:Amended by 239:Made under 199:Text with 72:Made under 32:Text with 487:Sanctions 466:Leverage 426:Directive 410:Basel III 387:Rationale 374:Basel III 366:insolvent 274:Date made 257:reference 203:relevance 105:Date made 90:reference 36:relevance 654:See also 552:Phase-in 450:Capital 404:Contents 323:Replaces 164:Replaces 523:sector. 398:capital 306:opinion 269:History 255:Journal 245:of the 233:Council 225:Made by 149:opinion 100:History 88:Journal 78:of the 66:Council 58:Made by 643:  633:  625:  617:  528:buffer 362:EU law 360:is an 331:Amends 172:Amends 757:(PDF) 396:with 217:Title 134:2014. 50:Title 831:2015 802:2015 769:2015 740:2015 714:2015 620:CET1 609:2019 606:2018 603:2017 600:2016 597:2015 594:2014 591:2013 583:12.5 391:The 353:The 304:EESC 247:TFEU 231:and 147:EESC 80:TFEU 64:and 577:7.5 571:2.5 201:EEA 34:EEA 859:: 822:. 818:. 793:. 771:. 730:. 685:^ 637:T2 628:T1 586:15 580:10 833:. 804:. 742:. 716:. 639:) 574:5 519:. 441:) 249:. 82:.

Index

European Union regulation
EEA
European Parliament
Council
Article 114
TFEU
Journal
OJ L 176, 27.6.2013, p. 1–337
EESC
OJ C 68, 6.3.2012, p. 39.
European Union directive
EEA
European Parliament
Council
Article 53(1)
TFEU
Journal
OJ L 176, 27.6.2013, p. 338–436
EESC
OJ C 68, 6.3.2012, p. 39–44
(EU) No. 575/2013
EU law
insolvent
Credit Institutions Directive 2013
Basel III
Capital Requirements Directives
financial crisis
capital
Basel III
Directive

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