European Commission: Revision of the Capital Requirements Directives (CRD IV)

In its Communication of 4 March 2009 the European Commission announced that it would (i) examine corporate governance rules and practice within financial institutions in the light of the financial crisis, and (ii) where appropriate, make recommendations or propose regulatory measures.

The Capital Requirements Directive aims at ensuring proper functioning of banking markets and restoring confidence in the banking sector, through:

• Effective, proportionate and deterrent sanctions which better ensure compliance with CRD rules
• Development of a level playing field which minimises the opportunities for regulatory arbitrage
• Effective supervision of banking service providers
• Effective corporate governance within credit institutions which should contribute to avoid excessive risk taking.