Newsletter January 2012: ECB’s cryptic judgment on capital requirements rule

FRANKFURT – A clue to where the European Central Bank (ECB) stands on one of the key rows provoked by the Capital Requirements Regulation comes in the Bank’s latest Financial Stability Review. The Capital Requirements Regulation and the associated Capital Requirements Directive (together CRD IV/CRR I) will transpose the Basel III capital and liquidity reforms in to EU law. The hotly debated question is how closely the proposed legislation does – or should – follow the standard crafted by international regulators on the Basel Committee.