11 Capital Requirements Directive (CRD IV)/Capital Requirements Regulation (CRR)

Subject(s):

Lending and credit — Deposit taking — Financial regulation

This chapter focuses on the CRD IV and the CRR. EU credit institutions have legal rights under CRD IV to provide certain services across the EEA. Article 33 of CRD IV allows credit institutions to passport the banking services and activities listed in Annex 1 of CRD IV, and for which they have been authorised to undertake in their home state, to clients and counterparties across the EEA. These include the following services and activities: taking deposits or other repayable funds; lending; payment services; trading on own account or for customers; and safe custody services. Once the UK has left the EU, UK-incorporated firms will no longer be able to passport their services from the UK across the EEA. A UK credit institution that seeks to provide banking services to EU clients will be required to become authorised under CRD IV or within individual EEA member states. Moreover, there is no mechanism to grant equivalence to the UK in respect of the CRR/CRD IV regime.