In the summer of 2010, the Directive had been approved by the European Parliament and the Council.CRD III consists of Directive 2010/76/EU and amends the recast banking Directive (2006/48/EC) and the recast capital adequacy Directive (2006/49/EC), which are jointly referred to as the Capital Requirements Directives (CRD).
The abbreviation CRD III refers to the second set of changes to the CRD. The changes provided for in CRD III concern the following subjects:
- Trading book – Adjustments of the internal models (incremental risk charge (IRC) and stressed value-at-risk) in the trading book, as well as a number of technical changes;
- Trading book – Replacement of the Incremental Default Risk Charge (IDRC) requirement by the IRC requirement as part of an internal model for specific position risk in the trading book;
- Trading book – A (temporary) alternative treatment of the correlation trading portfolio in the determination of the specific risk capital charge;
- Securitisations – Adjustments of the weights for (re)securitisation positions in the trading book and the banking book;
- Remuneration – Introduction of remuneration principles;
- Other technical changes:
a)Floors;
b)Capital;
c)Standardised Approach for credit risk;
d)Governance
e)Powers of supervisory authorities;
f)Disclosure.
The changes ensuing from CRD III will lead, among other things, to changes in the Financial Supervision Act (Wet op het Financieel Toezicht) and the Decree on Prudential Rules for Financial Undertakings (Besluit Prudentiële Regels Wft). Responsibility for adjustments to Acts and General Administrative Orders is borne by the Ministry of Finance.
The required changes to the supervisory regulations will be implemented by DNB in two amendment regulations and one supervisory regulation:
- CRD III-1 Amendment Regulation (Wijzigingsregeling CRD III-1 Wft 2011);
- CRD III-2 Amendment Regulation (Wijzigingsregeling CRD III-2 Wft 2011);
- Supervisory Regulation on Restrained Remuneration Policies 2011 (Regeling beheerst beloningsbeleid Wft 2011).
CRD III enters into force as follows:
- The provisions regarding remuneration policy and some technical changes take effect on 1 January 2011;
- The Basel 1 floor is extended from 1 January 2010 onwards;
- The D-LGD floor is extended from 31 December 2010 onwards;
- The other changes take effect on 31 December 2011.