Regulation (EU) No. 575/2013 (capital adequacy regulation)

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Regulation (EU) No. 575/2013

Title: Regulation (EU) No. 575/2013 of the European Parliament and of the Council of June 26, 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No. 646/2012
Designation:
(not official) 		Capital Adequacy Ordinance
Scope: EEA
Legal matter: Financial market law
Basis: TFEU , in particular Article 114
Procedure overview: European Commission
European Parliament
IPEX Wiki
To be used from: January 1, 2014 (different effective date for parts: January 1, 2014 (Art. 521.2), December 31, 2014 (Art. 521.2.c), January 1, 2015 (Art. 521.2.a), January 1, 2016 (Art. 521.2.b))
Reference: OJ L 176 of June 27, 2013, pp. 1–337
Full text Consolidated version (not official)
basic version
Regulation has entered into force and is applicable.
Please note the information on the current version of legal acts of the European Union !

The Capital Adequacy Ordinance, known as Regulation (EU) No. 575/2013, is an EU regulation applicable in the banking sector , which, within the framework of Basel III, contains requirements for the adequate capital adequacy of institutions , groups of institutions, financial holding groups and mixed financial holding groups and which are in of the previous Solvency Ordinance .

The widespread abbreviation CRR is derived from the English term Capital Requirements Regulation . The German legislator also uses the term capital requirement regulation. The Capital Adequacy Ordinance has been in force in the European Union since January 1, 2014 .

General

Basel III was implemented at European level through two legal acts. On the one hand with the Equity Capital Directive, the Directive 2013/36 / EU of June 26, 2013 on access to the activities of credit institutions and the supervision of credit institutions and investment firms (often referred to with the abbreviation CRD IV from English Capital Requirements Directive Number IV ), on the other hand with the regulation on capital adequacy dealt with here, regulation (EU) No. 575/2013 of June 26, 2013 on supervisory requirements for credit institutions and investment firms. The Capital Adequacy Directive and the Capital Adequacy Ordinance are collectively referred to as the “CRD IV package”.

The Capital Adequacy Ordinance is directly applicable law in Germany. For this purpose, the national regulations contradicting or conflicting with the Capital Adequacy Ordinance had to be removed from both the Banking Act (KWG) and other laws and ordinances. This was done through the Act to Implement Directive 2013/36 / EU on Access to the Activities of Credit Institutions and the Supervision of Credit Institutions and Investment Firms and to adapt supervisory law to Regulation (EU) No. 575/2013 on supervisory requirements for credit institutions and investment firms (CRD IV Implementation Act) . The Solvency Ordinance (SolvV) and the Large Loans and Millions Loans Ordinance (GroMiKV) were revised . In § 64r KWG important transitional provisions on the CRD IV implementation are included.

content

The Capital Adequacy Ordinance is primarily aimed at the supervised credit institutions and investment firms, which are defined in Article 4 and summarized under the heading "Institutions". Outside of the text of the regulation, these definitions of terms are often referred to under the terms " CRR credit institution ", " CRR investment company " and "CRR institute". In Section 1 (3d) of the KWG , these terms were adopted from January 2014 in place of deposit-taking credit institutions and securities trading companies. The CRR credit institutions include all universal , specialty and major banks and other credit institutions such as auto , installment and group banks , provided they do not benefit from the “group privilege” of Section 2 (1) No. 7 KWG. For CRR investment firms, Art. 4 Paragraph 1 No. 2 refers to the legal definition of Art. 4 Paragraph 1 No. 1 of Directive 2004/39 / EC . They are not credit institutions in the legal sense. Some provisions of the Capital Adequacy Ordinance do not apply to them.

Also in Article 4, the Capital Adequacy Ordinance gives numerous legal definitions of banking law terms (Article 4 (1)), in part by referring to legal definitions in other EU regulations. The definition includes credit institutions (Article 4, Paragraph 1, No. 1), financial holding company (No. 20), group of affiliated customers (No. 39), financial instrument (No. 50), operational risk (No. 52), collateral with security deposit (no. 58), securitization (no. 61), lending value (no. 74), own funds (no. 118) or bonded bond (no. 127). The evolutionary nature of this regulation enables institutions to choose between three approaches of varying complexity with regard to credit risk . In order to offer small institutions in particular the opportunity to opt for the more risk-sensitive IRB approach, the relevant provisions must be interpreted in such a way that exposure classes include all risk positions that are directly or indirectly assigned to them in this ordinance.

The Capital Adequacy Ordinance regulates, in particular, the amount and requirements for the own funds to be kept available for regulatory purposes (Articles 25-91), the capital adequacy requirements for risks defined and weighted by the banking supervisory authority, the disclosure of these own funds and the risks in the context of so-called Pillar III , the capital-related risk regulations (Article 107 et seq.), the inclusion of collateral (items 194-217), the large exposure rules (Rule 387 ff., 507), the liquidity rules (Rule 411 et seq.), the disclosure obligations (Article 431 et seq.), the operational risk (Article 446) and contains requirements for the future structure of a debt ratio ( leverage ratio ; Articles 429, 430, 499, 511). In addition, the ordinance on the defense against macroprudential risks (risks to the entire financial system) permits the tightening of certain regulations (Articles 458, 459, 513) and contains numerous transitional provisions (Articles 465 et seq.) That make it easier for institutions to comply with the new capital adequacy requirements To meet deduction regulations.

The Capital Adequacy Ordinance leaves room for maneuver for various regulations, which the old Solvency Ordinance exhausted, especially for internal approaches to determining capital adequacy requirements. This particularly concerns the implementation provisions on registration procedures for internal ratings based approaches, market risk models, internal models to calculate the counterparty risk and advanced measurement approaches for operational risk. The regulations were formulated in such a way that the national specifications previously made in the Solvency Ordinance on the requirements of the currently applicable CRD are retained where possible. This means that the institutes' effort to adapt to the implementation of the new regulations is limited.

The minimum capital requirements for credit risks are an essential part of the regulation of the Capital Adequacy Ordinance . According to Art. 92 (1), the total exposure amount for all risk positions to be covered by own funds is still limited to 12.5 times the equity capital, but earlier allowances for offsetting are no longer applicable or have been tightened. A rating obligation is provided for all risk positions, because Article 144 no. 1a requires a meaningful assessment of each borrower , with a rating system carry the risk characteristics of debtors and business accounting needs (Article 170 no. 1) and credit approvals is assigned a rating to each debtor (Article 172 No. 1a). The rating code resulting from the rating forms the basis of the risk weighting of a risk position. The worse the rating code, the higher the risk weight of a financial instrument ; this takes into account the higher credit risk . The credit institutions have to calculate the following three risk parameters to measure the credit risks :

All three parameters are hypothetical variables that are based on stochastic probabilities and serve as indicators for banks and banking supervisors to identify the level of risk. The Capital Adequacy Ordinance continues these three risk parameters, but brings with it more restrictive quotas.

The Capital Adequacy Ordinance is supplemented by more than 100 technical regulatory standards, technical implementation standards and guidelines that have been drawn up by the European Banking Authority and issued by the European Commission as directly applicable EU regulations.

Validity in Europe

Since the Capital Adequacy Regulation was enacted as an EU regulation , it applies in all EU member states . This avoids incentives for credit institutions to set up in an EU country with less strict regulation ( regulatory arbitrage ).

See also

literature

  • Beck, Samm, Kokemoor: Law on the Credit System . 170th consecutive March 2014
  • Leo W. Chini, Martin Oppitz: BWG, CRR. Volume II: EU Banking Supervision Regulation. Linde Verlag , 2nd edition 2018. ISBN 9783707337990

Web links

Individual evidence

  1. ↑ a b Regulation (EU) No. 575/2013 , accessed on June 30, 2017 . In: EUR-Lex
  2. ↑ Directive 2013/36 / EU
  3. ^ Federal Ministry of Finance of October 21, 2013, Basel III - a milestone in banking supervisory law
  4. ↑ Deutsche Bundesbank: The implementation of Basel III in European and national law , Monthly Report June 2013, p. 71 f.
  5. ↑ Detlef Hellenkamp: Banking . Springer-Verlag, 2015, p. 82 ( limited preview in Google Book search).