EU Publishes Capital Requirements Regulation II in Official Journal
EU published the final Capital Requirements Regulation II or CRR II (EU Regulation 2019/876) in the Official Journal of the European Union. Regulation 2019/876 of the European Parliament and of the Council amends Capital Requirements Regulation or CRR (Regulation No 575/2013). The amendments in the regulation cover the leverage ratio, the net stable funding ratio, requirements for own funds and eligible liabilities, counterparty credit risk, market risk, exposures to central counterparties, exposures to collective investment undertakings, large exposures, reporting and disclosure requirements, and the European Market Infrastructure Regulation (EMIR/EU Regulation No 648/2012). CRR II shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union. Regulation 2019/876 shall largely apply from June 28, 2021 with certain exceptions.
The provisions of CRR II are in line with the internationally agreed standards and ensure the continued equivalence of Capital Requirements Directive (CRD IV) and CRR with Basel III framework. The existing risk-reduction measures and, in particular, reporting and disclosure requirements have also been improved to ensure that they can be applied in a more proportionate way and that they do not create an excessive compliance burden, especially for smaller and less complex institutions. Article 1 on the scope of the regulation states that Regulation 2019/876 lays down uniform rules concerning general prudential requirements that institutions, financial holding companies, and mixed financial holding companies supervised under CRD IV shall comply with in relation to the following items:
(a) Own funds requirements relating to entirely quantifiable, uniform and standardized elements of credit risk, market risk, operational risk, settlement risk and leverage
(b) Requirements limiting large exposures
(c) Liquidity requirements relating to entirely quantifiable, uniform, and standardized elements of liquidity risk
(d) Reporting requirements related to points (a), (b) and (c)
(e) Public disclosure requirements
CRR II lays down uniform rules concerning the own funds and eligible liabilities requirements that resolution entities that are global systemically important institutions (G-SIIs) or part of G-SIIs and material subsidiaries of non-EU G-SIIs shall comply with. CRR II does not govern publication requirements for competent authorities in the field of prudential regulation and supervision of institutions, as set out in CRD IV.
Related Links
Effective Date: June 27, 2019
Keywords: Europe, EU, Banking, CRR 2, Credit Risk, Market Risk, Basel III, NSFR, LCR, TLAC, CRD IV, CRR, Reporting, European Council, European Parliament
Featured Experts

María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer

Pierre-Etienne Chabanel
Brings expertise in technology and software solutions around banking regulation, whether deployed on-premises or in the cloud.

Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Related Articles
BIS Innovation Hub Sets Out Work Program for 2021
BIS Innovation Hub published the work program for 2021, with focus on suptech and regtech, next-generation financial market infrastructure, central bank digital currencies, open finance, green finance, and cyber security.
EC Plans to Consult on Crisis Management and EDIS Framework Revisions
In an article published by SRB, Mairead McGuinness, the European Commissioner for Financial Services, Financial Stability, and Capital Markets Union, discussed the progress and next steps toward completion of the Banking Union.
EBA Finalizes Remuneration Standards for Investment Firms in EU
EBA finalized the two sets of draft regulatory technical standards on the identification of material risk-takers and on the classes of instruments used for remuneration under the Investment Firms Directive (IFD).
ECA Recommends Actions to Enhance Resolution Planning for Banks
EC published, in the Official Journal of the European Union, a notification that the European Court of Auditors (ECA) has published a special report on resolution planning in the Single Resolution Mechanism.
BoE Publishes Key Elements of the 2021 Stress Testing for Banks in UK
BoE published a scenario against which it will be stress testing banks in 2021, in addition to setting out the key elements of the 2021 stress test, guidance on the 2021 stress test, and the variable paths for the 2021 stress test.
PRA Proposes Rules on Identity Verification of Depositor Protection
PRA published a consultation paper (CP3/21) proposes rules regarding the timing of identity verification required for eligibility of depositor protection under the Financial Services Compensation Scheme (FSCS).
FSB Publishes Work Program for 2021
FSB published the work program for 2021, which reflects a strategic shift in priorities in the COVID-19 environment.
FCA Issues Update on Move to New Data Collection Platform
FCA announced that 50% firms have started using the new data collection platform RegData, which is slated to replace the existing platform known Gabriel.
Bundesbank Publishes Derivation Rules for Reporting by Banks
Bundesbank published Version 5.0 of the derivation rules for completeness check at the form level, with respect to the data quality of the European harmonized reporting system.
FED Revises Capital Planning and Stress Testing Requirements for Banks
FED finalized a rule that updates capital planning requirements to reflect the new framework from 2019 that sorts large banks into categories, with requirements that are tailored to the risks of each category.