Regulatory capital treatment of derivatives

This Overview is a guide to the Financial Services content within the Regulatory capital treatment of derivatives subtopic, with links to appropriate materials.

CRD IV/CRR

The Capital Requirements Directive 2013/36/EU (OJ L 176/338) (EU CRD IV) and the Capital Requirements Regulation (EU) 575/2013 (OJ L 176/1) (EU CRR) were the mechanism through which the EU implemented the global capital adequacy framework, Basel III.

As of IP completion day (31 December 2020), Retained Regulation (EU) 575/2013 (UK CRR) applies in the UK. As of 1 January 2022, a number of provisions of UK CRR have been revoked, and corresponding provisions appear in the Prudential Regulation Authority (PRA) Rulebook.

Basel III is a global package of reforms setting out international standards of capital adequacy following the financial crisis. The G20 Declaration (the Declaration of 2 April 2009 on ‘Strengthening the Financial System’) called for internationally consistent efforts aimed at strengthening transparency, accountability and regulation by improving the quantity and quality of capital in the banking system. The declaration also called for the introduction of a supplementary non-risk-based measure to contain the build-up of leverage in the banking system

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