Comparison between Capital Requirements Directive IV and Basel III

On 20 July 2011 the European Commission published its much-awaited legislative proposal for the implementation of Basel III in the European Union ("CRD IV").

One of the key changes from the current European legislation on prudential regulation for banks and investment firms is that CRD IV adopts, in significant part, the form of a Regulation and not a Directive. The use of a Regulation (which becomes law in each Member State without transposition by implementing legislation) to impose rules on key regulatory areas such as capital and liquidity has been a cause of concern for some national regulators (including those in the UK) as it is overtly designed to create a more uniform set of rules across the European Union by leaving less to the discretion of national regulators.

This briefing note summarises some of the key differences between CRD IV and Basel III and between CRD IV and the existing rules. Click here to read more.