Today, the European Commission launched a public consultation on further possible changes to the Capital Requirements Directive. The consultation, and related FAQs, reflect some of the commitments made by G20 leaders at summits in London and Pittsburg in 2009. The possible changes announced today will supplement the two existing sets of revisions adopted in October 2008 and July 2009. The Commission is soliciting comments on proposed changes in seven policy areas:
- Liquidity standards: Introducing liquidity standards that include a liquidity coverage ratio requirement underpinned by a longer-term structural liquidity ratio.
- Definition of capital: Raising the quality, consistency and transparency of the capital base.
- Leverage ratio: Introducing a leverage ratio as a supplementary measure to the Basel II risk-based framework based on appropriate review and calibration.
- Counterparty credit risk: Strengthening the capital requirements for counterparty credit risk exposures arising from derivatives, repos and securities financing activities.
- Countercyclical measures: A countercyclical capital framework will contribute to a more stable banking system, which will help dampen, instead of amplify, economic and financial shocks.
- Systemically important financial institutions: The Commission is consulting on appropriate measures to deal with the risk posed by such institutions.
- Single rule book in banking: The Commission is consulting on areas where more stringent requirements might be necessary. In addition, the Commission is consulting on the appropriate prudential treatment of real estate lending. This is part of the Commission's commitment to create a single rule book in Europe.
Internal Market and Services Commissioner Michel Barnier stated: "It is essential that we learn all the lessons from the crisis…[b]ut before making a proposal on 'CRD IV', I want to ensure that we have consulted widely and assessed the impact of the potential changes."
The deadline for interested stakeholders to submit comments to the consultation is April 16, 2010.