The EESC welcomes the main thrust of Capital Requirements Directive IV (CRD IV) and the Basel III accord on which it is based. However, CRD IV will increase banking costs and this is an important consideration for EU business, especially SMEs. The Basel framework is designed for internationally active banks all of which should adhere to the framework.
The new framework brings together both micro-prudential and macro-prudential elements. On the micro-prudential side, there is higher and better quality capital, better coverage of the risks, the introduction of a leverage ratio as a backstop to the risk-based regime, and a new approach to liquidity. On the macro-prudential side, CRD IV requires the build-up of capital buffers in good times that can be drawn down in periods of stress, as well as other measures to address systemic risk and interconnectedness.
In the opinion of the EESC, new business models must be ethical and sustainable. Customer relationships need to be improved; business practices need to be scrupulously ethical and reward structures must be radically revised. All the actors were culpable as the crisis developed. They must all come together now to build credit institutions capable of supporting the EU economy in the difficult decade ahead.
For more information please contact the INT Section Secretariat