Key regulations: capital, liquidity and leverage
Basel Framework
Scope: Global | Regulator: BCBS | Industry: Financial | Theme: Regulatory capital | Release date: 17/06/2024
The Basel Framework is the full set of standards developed by the Basel Committee on Banking Supervision (BCBS), the leading global standard-setting body for banking supervision. BCBS members have agreed to fully implement these standards and apply them to internationally active banks in their jurisdictions.
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Capital Requirements Directive (CRD, Consolidated Version)
Scope: EU | Regulator: European Parliament and Council | Industry: Finance | Theme: Regulatory capital | Date of publication: 29/07/2024
Directive 2013/36/EU, also known as CRD, lays down the rules for taking up the activity of credit institutions and for the prudential supervision of credit institutions and investment firms in the European Union. This directive coordinates national rules on the authorization, governance and supervisory framework for these institutions. Together with the Capital Requirements Regulation (CRR), with which it makes up the legal framework for banking regulation in the EU, it promotes the stability of the financial system through rules on capital, risk management and corporate governance.
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Capital Requirements Directive amendment (CRD VI)
Scope: EU | Regulator: European Parliament and Council | Industry: Finance | Theme: Regulatory capital | Date of publication: 19/06/2024
Directive (EU) 2024/1619 amends Directive 2013/36/EU in relation to supervisory powers, sanctions, third-country branches and environmental, social and governance (ESG) risks. It aims to strengthen banking supervision in the EU by improving transparency and promoting high ethical standards. It introduces requirements to prevent conflicts of interest, an authorization regime for third-country branches and regulates supervisory practices in key areas, including ESG risk management. The Directive also allows authorities to withdraw authorizations in specific cases of insolvency, ensuring an orderly exit from the market.
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Capital Requirements Regulation (CRR, Consolidated Version)
Scope: EU | Regulator: European Parliament and Council | Industry: Finance | Theme: Regulatory capital | Date of publication: 09/07/2024
Regulation (EU) No 575/2013, also known as CRR, sets out prudential requirements for credit institutions and investment firms in the European Union. This regulation, based on the Basel III framework, covers aspects such as minimum capital requirements, risk management, liquidity and leverage, and aims to strengthen the stability of the European financial system. It includes specific provisions to ensure the alignment of these rules at EU level, thus promoting a safer and more stable internal market through uniform rules applicable in all Member States.
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Capital Requirements Regulation amendment (CRR III)
Scope: EU | Regulator: European Parliament and Council | Industry: Finance | Theme: Regulatory capital | Date of publication: 19/06/2024
A regulation that updates the prudential framework completing the transposition of Basel III standards in the European Union. It focuses on ensuring that banks hold sufficient own funds to cover key financial risks, such as credit risk, market risk and operational risk. It introduces the "risk-weighted asset floor", which sets a minimum threshold for capital based on internal models to avoid underestimating risks. It also aims to enhance the stability of the financial system, protect depositors and promote the Resilience of financial institutions.
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Directive amending Solvency II
Scope: EU | Regulator: European Parliament and Council | Industry: Insurance | Theme: Solvency| Date of publication: 16/10/2024
Amendment of the Directive regulating and harmonizing EU insurance regulation. It mainly concerns the amount of capital that EU insurance companies must hold in order to reduce the risk of insolvency. The amendment to the Directive aims to improve proportionality in the application of regulatory requirements, ensuring that small and non-complex firms are not unduly burdened. It also improves the quality of supervision by promoting more consistent and convergent supervisory practices across the EU. In addition, it introduces new reporting and disclosure requirements, including the need for an audit of the solvency and financial condition report.
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Solvency II
Scope: EU | Regulator: European Parliament and Council | Industry: Insurance | Theme: Solvency | Date of publication: 09/01/2024
The Solvency II Directive (Directive 2009/138/EC) establishes a regulatory framework for insurers and reinsurers in the European Union, to ensure the protection of policyholders and the financial stability of the sector. It is based on three main pillars: quantitative requirements, including valuation of assets and liabilities and capital requirements; qualitative requirements, such as governance and risk management; and disclosure and transparency requirements.
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