CRD IV—essentials
CRD IV—essentials

The following Financial Services guidance note provides comprehensive and up to date legal information covering:

  • CRD IV—essentials
  • Scope of CRD IV and CRR
  • Definitions of capital
  • Own funds
  • Liquidity
  • Liquidity Coverage Ratio (LCR)
  • Timing for implementation of the LCR
  • LCR reporting on liquid assets
  • UK implementation of the liquidity coverage requirement
  • Leverage ratio
  • more

The UK is leaving the EU on Exit Day (as defined in the European Union (Withdrawal) Act 2018). This has an impact on this Practice Note. For further guidance on the impact of Brexit on the CRR and prudential regulation, please see Practice Note:Preparing for Brexit: CRR and prudential regulation—quick guide.

The Capital Requirements Directive (Directive 2013/36/EU) and the Capital Requirements Regulation (Regulation (EU) 575/2013) (CRR) (together CRD IV) was the mechanism through which the EU implemented the global capital adequacy framework, Basel III. The CRD IV package of reforms was adopted and published in the first half of 2013, with implementation of the majority of provisions on 1 January 2014, with the exception of certain provisions specified in Artlce 521 of the CRR. As CRD IV combined CRD IV and CRR (with amending corrigendum), elements of the requirements were directly applicable and others required national implementation.

CRD IV recast the Capital Requirements Directive (2006/48/EC and 2006/49/EC) (CRD) and introduced EU-specific reforms relating to prudential requirements for credit institutions and investment firms.

In the UK, the Prudential Regulation Authority (PRA) is the lead national supervisory authority in its role as prudential regulator for banks and other deposit taking bodies as well as systemically important investment firms.

Basel III is a global package of reforms setting out international standards of capital adequacy following the