CRD/CRR – Capital Requirements Directive and Regulation (Basel III Implementation)

The CRD/CRR package — comprising the Capital Requirements Directive IV (CRD IV, Directive 2013/36/EU) and the Capital Requirements Regulation (CRR, Regulation (EU) No 575/2013) — forms the regulatory backbone of banking supervision in the European Union. It transposes the international Basel III capital and liquidity standards of the Basel Committee on Banking Supervision (BCBS) into European law.

The CRR as a directly applicable regulation defines quantitative requirements for own funds (CET1, AT1, Tier 2), liquidity ratios (LCR, NSFR), leverage ratio and large exposure limits. CRD IV as a directive governs the authorisation of credit institutions, governance requirements, capital buffers (capital conservation buffer, countercyclical buffer, systemic risk buffer) and supervisory review processes (SREP).

With CRR III (Regulation 2024/1623) and CRD VI (Directive 2024/1619), published on 19 June 2024, the final Basel III reforms are implemented in the EU, including the output floor and revised approaches for credit, market and operational risk.

In response to the 2008 financial crisis, the Basel Committee on Banking Supervision developed the Basel III framework, published from 2010 onwards. The European Commission presented the CRD IV/CRR package proposal on 20 July 2011 to implement these standards in the EU. The package was published in the EU Official Journal on 27 June 2013 (OJ L 176). The CRR entered into force on 28 June 2013 and the CRD IV on 17 July 2013, both applying from 1 January 2014. The package was subsequently supplemented by CRD V/CRR II (2019) with MREL requirements, NSFR and revised market risk rules.

On 19 June 2024, CRR III (Regulation 2024/1623) and CRD VI (Directive 2024/1619) were published in the Official Journal, implementing the final Basel III reforms of 2017 in the EU. CRR III entered into force on 9 July 2024 and is largely applicable from 1 January 2025. The CRD VI transposition deadline for Member States runs until 10 January 2026. The FRTB provisions (market risk) were first postponed to 1 January 2026 and, by Commission Delegated Regulation (EU) 2025/1496, further postponed to 1 January 2027.

The CRD/CRR package applies to a broad range of financial institutions in the EU:

• Credit institutions: All credit institutions (banks) authorised in the EU that accept deposits or other repayable funds from the public and grant credits for their own account
• Investment firms: Certain investment firms (since the entry into force of IFR/IFD in 2021, most investment firms are subject to separate rules)
• Consolidated supervision: Requirements at individual and group level; banking groups with parent undertakings in the EU are subject to consolidated supervision
• Own funds requirements: Minimum requirements for Common Equity Tier 1 (CET1: 4.5%), Additional Tier 1 (AT1: 1.5%) and Tier 2 (T2: 2%), plus capital buffers
• Liquidity requirements: Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR)
• Supervisory review process: Annual SREP by competent authorities setting institution-specific capital requirements

• Own funds requirements: Minimum capital ratios of 8% total capital (of which 4.5% CET1) plus capital buffers (capital conservation buffer 2.5%, countercyclical buffer 0-2.5%, systemic risk buffer up to 5%)
• Output floor (CRR III): Gradual introduction from 2025 of a floor for internal models: RWA from internal approaches may not fall below 72.5% of the standardised approach (phase-in: 50% in 2025, 55% in 2026, 60% in 2027, 65% in 2028, 70% in 2029, 72.5% from 2030)
• Liquidity ratios: LCR (high-quality liquid assets must cover net cash outflows over 30 days at 100%) and NSFR (stable funding must cover stable assets at 100%)
• Leverage ratio: Minimum leverage ratio of 3% (Tier 1 capital / total exposure measure); additional buffer for G-SIBs
• Credit risk standardised approach (CRR III): Revised standardised approach with more granular risk weighting for real estate exposures, corporate exposures and specialised lending
• Operational risk (CRR III): New standardised measurement approach (SMA) replaces all previous approaches; based on the Business Indicator and historical losses
• ESG risks: First-time disclosure requirements for ESG risks and integration of sustainability aspects into the supervisory framework

The entry states that the FRTB market-risk provisions were postponed to 1 January 2026 (in history_de/en and the 2026-01-10 key_date). In fact, the application of the FRTB own-funds requirements for market risk was further postponed by one year to 1 January 2027 by Commission Delegated Regulation (EU) 2025/1496 of 12 June 2025 (OJ 19.09.2025). Moreover, the FRTB application date is NOT 10 January 2026 (that is the CRD VI transposition deadline) — the original FRTB postponement was to 1 January 2026, not 10 January.