ISDA and the Association for Financial Markets in Europe (AFME) have published their views and recommendations on key priorities in the sixth Capital Requirements Directive and the third Capital Requirements Regulation (CRD VI, CRR III).

The legislative proposal is expected to be published by the European Commission later this year. This will come at an important time as policy-makers deal with the fallout from the COVID-19 pandemic and the need to ensure a strong and sustained economic recovery. This makes it even more important that the impact of CRR III is correctly assessed and carefully calibrated so that it does not constrain banks’ ability to support the economy.

CRR III also needs to be considered in the context of the EU’s urgent priorities to complete the Banking Union, reduce fragmentation of financial markets and develop and deepen Europe’s capital markets through the establishment of an effective Capital Markets Union.

In this publication, ISDA and AFME present recommendations to ensure CRR III is faithful to the overarching objectives of Basel III but also reflects these priorities.