On June 7, 2019, the Official Journal of the European Union (EU) published the amended Capital Requirements Directive (CRD V) and Capital Requirements Regulation (CRR II).
The goal of the CRD V and CRR II combined packages was to improve the stability of the financial system by addressing shortcomings of previous regulation, such as;
- Lack of visibility for regulators when assessing capital adequacy of non-EU domiciled financial institutions operating within the EU
- Excessive cost of reporting for small, less complicated organizations
- Financial institutions clarify capital calculations to reduce diversity in practice when calculating capital at quarter-end
The package also refines the Basel III framework and introduces the first elements of the much-anticipated Basel IV.