EU bank capital negotiations: Political deal reached by policymakers in Brussels

Perspectives

EU bank capital negotiations: Political deal reached by policymakers in Brussels 

A political deal has been reached in negotiations on the EU’s bank capital legislative package, the fifth Capital Requirements Directive and second Capital Requirements Regulation (CRD5/CRR2), plus changes to the Bank Recovery and Resolution Directive (BRRD2). On 4 December, EU Finance Ministers formally endorsed the deal reached by negotiators on the key political elements of the package.

The proposed legislation implements components of the Basel III framework, including giving effect to Total Loss Absorbing Capacity (TLAC), the Net Stable Funding Ratio (NSFR), the leverage ratio, and the Fundamental Review of the Trading Book (FRTB) in part, but it excludes the package of Basel reforms that was agreed on 7 December 2017 by the Basel Committee on Banking Supervision (BCBS).

This article provides further detail on the key points of agreement that we understand have emerged in the deal between the Parliament and the Council and our views on the next steps as this proposal progresses towards becoming law. 

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