EC: Possible impact of the CRR and CRD IV on bank financing of the economy

15 July 2015

The public consultation will enable the European Commission to obtain stakeholders’ views and evidence on the potential impact of Capital Requirements Regulation (CRR) and Directive (CRD IV) on bank lending to the economy.

Jonathan Hill, EU Commissioner for Financial Stability, Financial Services and Capital Markets Union, will launch the consultation tonight at the UK leg of the "Investment Roadshow", promoting the EU's €315 billion Investment Plan (IP/14/2128): "Bank funding is and will remain central to our economy; whether it is lending to small businesses, or long-term investment in infrastructure. The Capital Requirements Regulation and Directive have restored resilience, stability, and trust in the European banking sector. These are vitally important objectives which the legislation has helped to achieve—but it is right to ask whether the rules have unintended consequences. This is part of our commitment to Better Regulation, and helps us strike the best possible balance between managing risk and enabling growth."

Capital Requirements for banks are set out in the Capital Requirements Regulation (CRR) and Capital Requirements Directive (CRDIV). While stronger capital requirements are needed to ensure the resilience and sustainability of the banking sector, the Regulation obliges the Commission to report on their impact on loans to people, small businesses and long-term financing in infrastructure.

Questions the consultation is seeking to answer include:

• To what extent have CRR and CRDIV affected the level of capital held by banks?
• Are all the new requirements under all circumstances proportionate to the risks they were meant to address?
• What impact are the rules having on lending to smaller businesses, and to infrastructure projects?
• Could some of the rules be simplified or differentiated by risk or size, without compromising on their objectives of financial soundness and stability of banks?

Today's public consultation seeks the broadest possible range of views from the financial services industry and other stakeholders. All interested parties are encouraged to complete the questionnaire, which will help the Commission provide its report. As a follow-up, the Commission will publish a feedback report and organise a public hearing later this year, paving the way for the Commission's final report in 2016.

Responds to EC public consultation can be sent to EC by 7.10. 2015.

Full information

Consultation document

Annex to consultation document

Related press release

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