Directive (EU) 2024/1619 amending Directive 2013/36/EU as regards supervisory powers, sanctions, third-country branches, and environmental, social and governance risks

Summary:

Directive (EU) 2024/1619 - adopted by the co-legislators on 31 May 2024 - introducing amendments to Directive 2013/36/EU as regards supervisory powers, sanctions, third-country branches, and environmental, social and governance risks. This is also known as the CRD VI. This is a text with EEA relevance.

Further information:

This Act introduces amendments to Directive 2013/36/EU - also known as the Capital Requirements Directive (CRD IV) - which governs access to deposit taking by banks and investment firms. It seeks to contribute to financial stability and to the steady financing of the economic in the context of the post COVID-19 (coronavirus) pandemic economic recovery. Measures aim specifically at:

• strengthening the risk-based capital framework, without significant increases in capital requirements overall;
• enhancing the focus on environmental, social and governance (ESG) risks in the prudential framework;
• further harmonising supervisory powers and tools;
• reducing banks' administrative costs related to public disclosures and to improve access to banks' prudential data.

The review of the framework on bank capital requirements was included in the European Commission's 2020 Work Programme. A draft law was eventually adopted by the Commission on 27 October 2021, as part of the so-called 2021 Banking Package. The Council of the European Union adopted its general approach to the text on 8 November 2022. The plenary of the European Parliament endorsed a negotiating position on the proposal on 15 February 2023. An informal agreement between the co-legislators on a compromise text for this file was reached on 27 June. This was formally endorsed by Parliament on 24 April 2024 and by the Council on 30 May. The Act was signed by the co-legislators on 31 May 2024 and published in the Official Journal on 19 June 2024.

• Primary Source

Commentary and Analysis

DLA Piper: Insights, 29/11/2021: EU to tighten conditions of access to single market for third-country banks https://www.dlapiper.com/en-gb/insights/publications/2021/11/eu-to-tighten-conditions-of-access-to-single-market-for-third-country-banks

European Parliamentary Research Service (EPRS): Briefing, 23/03/2022: Review of the capital requirements framework - Initial Appraisal of a European Commission Impact Assessment https://www.europarl.europa.eu/thinktank/en/document/EPRS_BRI(2022)699499

European Parliamentary Research Service (EPRS): Briefing, 21/09/2023: Amendments to banking capital requirements legislation https://www.europarl.europa.eu/thinktank/en/document/EPRS_BRI(2023)739368

A&O Shearman: Insights, 26/01/2024: CRD VI - What EU branches of third country banks need to know https://www.aoshearman.com/en/insights/crd-vi-what-eu-branches-of-third-country-banks-need-to-know

Norton Rose Fulbright: Publications, February 2024: CRD VI: Third country branches and subsidiaries https://www.nortonrosefulbright.com/en/knowledge/publications/67d30435/crd-vi-third-country-branches-and-subsidiaries

Ashurst: Insights, 07/02/2024: Q&A on the third-country branch introduced by CRD VI https://www.ashurst.com/en/insights/qa-on-the-third-country-branch-introduced-by-crd-vi/

Ernst&Young (EY), 19/02/2024: How will the Swiss banks navigate upcoming EU branch requirements under CRD VI? https://www.ey.com/en_ch/banking-capital-markets/how-will-you-navigate-the-new-eu-third-country-branches-requirements-under-crd-vi

Deloitte (UK): Perspective, 29/02/2024: CRD VI is now final: non-EU banks must start preparing now https://www.deloitte.com/uk/en/Industries/financial-services/blogs/crd-is-now-final.html

Ashurst: Insights, 14/03/2024: The New EU Capital Requirements Regime https://www.ashurst.com/en/insights/the-new-eu-capital-requirements-regime/

European Parliamentary Research Service (EPRS): At a Glance, 16/04/2024: Banking union https://www.europarl.europa.eu/thinktank/en/document/EPRS_ATA(2024)760426

Wolters Kluwer: Expert Insights, 09/05/2024: With the EU Banking Package voted banks have one last chance to get the CRR3 implementation right https://www.wolterskluwer.com/en/expert-insights/with-the-eu-banking-package-set-institutions-have-one-last-chance-to-get-crr3-implementation-right

PwC (Malta): Insights, 14/05/2024: A closer look at the CRR III/CRD VI Banking package https://www.pwc.com/mt/en/publications/banking/closer-look-at-the-crr-iii-crd-vi-banking-package.html

Herbert Smith Freehills (HSF): HSF Notes Blog, 21/05/2024: CRD VI: Non-EU banks must review their European operating model now https://www.herbertsmithfreehills.com/notes/fsrandcorpcrime/2024-05/crd-vi-non-eu-banks-must-review-their-european-operating-model-now

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Official

EUR-LEX: COM(2021)663: Proposal for a Directive amending Directive 2013/36/EU as regards supervisory powers, sanctions, third-country branches, and environmental, social and governance risks, and amending Directive 2014/59/EU https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=COM:2021:663:FIN

EUR-LEX: SWD(2021)320: Staff Working Document accompanying the Proposal - Impact Assessment Report https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=SWD:2021:320:FIN

EUR-LEX: SWD(2021)321: Staff Working Document accompanying the Proposal - Executive Summary of the Impact Assessment Report https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=SWD:2021:321:FIN

Publications Office of the EU: EU Law Tracker: Proposal for a Directive amending Directive 2013/36/EU as regards supervisory powers, sanctions, third-country branches, and environmental, social and governance risks, and amending Directive 2014/59/EU https://law-tracker.europa.eu/procedure/2021_341?lang=en

European Parliament: Legislative Observatory: Procedure File for Proposal on Amendments to the Capital Requirements Directive (2021/0341(COD)) https://oeil.secure.europarl.europa.eu/oeil/popups/ficheprocedure.do?lang=en&reference=2021/0341(COD)

European Parliament: Legislative Train Schedule: Review of the Capital Requirements Directive (Directive 2013/36/EU) https://www.europarl.europa.eu/legislative-train/theme-an-economy-that-works-for-people/file-crd-crr-review-1

General Secretariat of the Council (EU): Policies: Banking Union https://www.consilium.europa.eu/en/policies/banking-union/

European Commission: Press Release, 27/10/2021: Banking Package 2021: new EU rules to strengthen banks' resilience and better prepare for the future https://ec.europa.eu/commission/presscorner/detail/en/ip_21_5401

European Commission: Questions and Answers on the Banking Package 2021 (27 October 2021) https://ec.europa.eu/commission/presscorner/detail/en/qanda_21_5386

European Parliament: Press Release, 24/01/2023: Economic and Monetary Affairs Committee voted to finalise reforms of banking rules https://www.europarl.europa.eu/news/en/press-room/20230123IPR68613/

Council of the European Union: Press Release, 27/06/2023: Banking sector: Provisional agreement reached on the implementation of Basel III reforms https://www.consilium.europa.eu/en/press/press-releases/2023/06/27/banking-sector-provisional-agreement-reached-on-the-implementation-of-basel-iii-reforms/

European Parliament: Press Release, 29/06/2023: Deal reached to finalise reforms of banking rules https://www.europarl.europa.eu/news/en/press-room/20230612IPR97201/

European Commission: DG Financial Stability, Financial Services & Capital Markets Union: News, 14/12/2023: Latest updates on the banking package https://finance.ec.europa.eu/news/latest-updates-banking-package-2023-12-14_en

Council of the European Union: Press Release, 30/05/2024: Basel III reforms: new EU rules to increase banks’ resilience to economic shocks https://www.consilium.europa.eu/en/press/press-releases/2024/05/30/basel-iii-reforms-new-eu-rules-to-increase-banks-resilience-to-economic-shocks/

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Council of the European Union: Press Release, 08/11/2022: Banking sector: Council agrees its position on the implementation of Basel III reforms https://www.consilium.europa.eu/en/press/press-releases/2022/11/08/banking-sector-council-agrees-its-position-on-the-implementation-of-basel-iii-reforms/

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