Treasury is consulting on how to implement changes to the CRD into UK law. CRD 2, adopted in September 2009, must be transposed into national law by the end of October 2010 and the changes must take effect by the end of 2010. The changes focus on:

  • large exposures and derogations for bank networks from prudential requirements;
  • principles and rules on the treatment of hybrid capital instruments within original own funds;
  • capital requirements for securitisation positions; and
  • crisis management and colleges of supervisors.

FSA is already consulting on implementing most of CRD2 (see FReD This Week 23 December 2009). Treasury needs to make few changes to complete implementation. It confirms the UK does not intend to be super-equivalent to the CRD. The changes Treasury plans will amend the Capital Requirements Regulations 2006 in respect of definitions (mainly to establish what is within a banking or investment group), setting out FSA’s role in supervision of own funds of consolidated institutions and in respect of colleges of supervisors. It also includes provisions on powers of host states for significant branches of EEA institutions. Treasury asks for comments by 30 March.