HM Treasury Consults on UK Implementation of Amendments to the Capital Requirements Directive
30 Mar 2010
Following the EU’s adoption of a Directive to amend the Capital Requirements Directive in September 2009, HM Treasury has published a consultation paper which sets out how it intends to implement part of the package of amendments (CRD2) in the UK.
Broadly, the CRD2 amendments fall into four categories:
• the revision of certain rules that were brought forward from previous Directives, such as the large exposures regime and derogations for bank networks from prudential requirements;
• the establishment of principles and rules that had not previously been formalised at the EU level, such as the treatment of hybrid capital instruments within original own funds;
• the clarification of the supervisory framework for crisis management; and
• revisions prompted by the financial crisis, including rules related to capital requirements and risk management for securitisation positions.
Many of these changes are to be effected by the FSA, through amendments to the FSA Handbook. The FSA has published a separate consultation paper, entitled “Strengthening Capital Standards 3” which sets out its proposals. The Treasury consultation is confined to the remaining areas, which mainly relate to the imposition of duties on the FSA.
The consultation period opened on 5 January 2010 and will close on 30 March 2010
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