European Parliament Approves CRD IV Legislative Package

The approval of the European Parliament on 16 April 2013 of the CRD IV legislative package means that once it is formally approved by the Council of Ministers, that the CRD IV legislation will apply across the European Union, on a phased basis, from 1 January 2014. 

CRD IV consists of a Capital Requirements Regulation (the "CRR"), and the fourth edition of the Capital Requirements Directive (the "CRD IV").  The CRR will impose a single set of prudential rules, which will apply directly to all banks in Member States without the need for domestic transposition. 

The CRD IV provisions will require the enactment of domestic legislation in order to have legal effect.  Certain discretions are afforded to Member States, including the right to impose higher capital requirements than those set out in the CRD IV.