The European Commission has adopted a package of Regulatory Technical Standards (RTS) with a view to fully implementing important provisions of the Capital Requirements Regulation and Directive (CRR/CRD). The nine RTS set out rules for competent authorities and market participants regarding disclosures linked to securitisation instruments, measure potential losses from derivative positions and counterparty failure, as well as specifying the types of instruments that can be used for paying bonuses.
As Commissioner or Internal Market and Services Michel Barnier said: “The development of the single rule book in banking is a vast undertaking. Its objective is to ensure all banks comply with one set of rules f the single market. This ensures good regulation and a level playing field wherever banks are based. The adoption of the Capital Requirements package created a framework. But to reap the full benefit of the single rule book, many aspects must be further developed by technical standards, delegated and implementing acts. What we are delivering today is a decisive step in that direction thanks to the excellent cooperation between the European Banking Authority and the European Commission.”
RTS are needed to provide detailed provisions on the ways in which competent authorities and market participants must apply the rules contained in CRR/CRD on a number of technical issues.
The new capital requirements rules (CRR/CRD), which apply from 1 January 2014, play a vital role in the construction of a stricter regulatory environment for banks and investment firms. CRR/CRD sets stronger prudential requirements for banks, requiring them to keep sufficient capital reserves and liquidity. This new framework will make EU banks more solid and will strengthen their capacity to adequately manage risks and absorb possible losses.