Capital Adequacy Directive

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The Capital Adequacy Directive was a European directive that aimed to establish uniform capital requirements for both banking firms and non-bank securities firms first issued in 1993 and revised in 1998. These was superseded by the Capital Requirements Directives starting in 2006.

History

The original 93/6/EEC (CAD1) directive was amended by 98/31/EEC (CAD2), to incorporate banks' own estimate of capital using value-at-risk techniques. Annex 1 models were virtually unchanged by CAD2, so there has been no change in the CAD1 regime.

A third revision of the directive 2006/49/EC was issued on 14 June 2006 and would use the new name of Capital Requirements Directive (CRD) . This came into force together with recast of a related banking directive on 20 July 2006. The main change was the adoption of Basel II guidelines into the directive.[1]

In 2009, 2010 and 2013 three further revisions were issued known as CRD II, CRD III and CRD-IV.

References

  1. ↑ "Capital Requirements Directive: legislation in force". European Commission. Retrieved June 3, 2013. 

External links

For further information see the European Commission web site: Free movement of services / Financial Services / Banking / Regulatory Capital

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