Financial services: Commission welcomes political agreement on EU Banking Package

The Commission welcomes the political agreement reached yesterday, between the European Parliament and the Council on the Commission’s proposal of 2021 for a review of EU banking rules (the Capital Requirements Regulation and the Capital Requirements Directive), the ‘Banking Package’.

The package implements the final set of international standards agreed by the EU and its G20 partners in the Basel Committee on Banking Supervision, so-called Basel III. It will make EU banks even more resilient to possible economic shocks, while contributing to Europe’s transition to climate neutrality. Specifically, the package aims to ensure that banks using “internal models” to calculate their capital requirements measure risks in a consistent way.

Beyond the implementation of Basel III standards, the package also contains a number of measures to keep the EU prudential framework fit for purpose in terms of sustainability risks and in terms of supervision, including regarding third-country branches. It also provides stronger tools for supervisors overseeing EU banks.

Mairead McGuinness, Commissioner for Financial Services, Financial Stability and Capital Markets Union, said: “Recent events in the banking sector at global level confirm the importance of strong supervision and sound prudential regulation. With this agreement the EU is the first jurisdiction worldwide to implement the final elements of the Basel III accord. But we are doing more, by further improving supervision of our banks, and making sure they adapt to future challenges, notably regarding Environmental, Social and Governance (ESG) risks. This package ensures that the EU banking sector is fit for the future, and can continue to be a reliable and sustainable source of finance for the EU economy and to the benefit of its citizens.”

The new rules amending the Capital Requirements Regulation (CRR) are expected to apply from 1 January 2025, with certain elements of the regulation phasing in over the coming years.

Changes related to the supervision of credit institutions are implemented via an amendment of the Capital Requirements Directive (CRD) and will have to be transposed by member states by 30 June 2026.