EU plans to adopt Basel III rules, to enhance EU banks’ resilience and financial stability, were backed by the Economic and Monetary Affairs Committee on Tuesday.
Proposals to amend the EU’s prudential requirements (CRD-V/CRR-II) should help boost the EU economy by increasing lending capacity and creating deeper and more liquid capital markets.
Proportionality
To ensure that banks are treated proportionately, according to their risk profiles and systemic importance, MEPs inserted a definition of a “small and non-complex institution” that should be subject to simplified requirements with regard to recovery and resolution planning and reduced reporting frequency.
Leverage ratio
MEPs agreed to a binding 3% leverage ratio, MEPs and an additional 50% buffer for global systemically important institutions (GSIIs). They also refined Net Stable Funding Ratio (NSFR), rules for ascertaining whether an institution holds sufficient stable funding to meet its funding needs during a one-year
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