Basel IV - Capital Requirements Regulation (CRR III)
The European co-legislators under the Swedish presidency have recently reached a political agreement on the European implementation of Basel IV, the Capital Requirement Regulation (CRR) III. The regulators will now work under the Spanish presidency in the coming months to finalise the numerous remaining technical issues to finalise the amended capital requirements regulation (CRR III). Leaseurope will continue engaging with relevant policy-makers to ensure that the main achievements for leasing during the negotiations remain in the final text.
Following the publication of the European Commission proposal in October 2021, Leaseurope together with the national leasing associations have been in regular contacts with European Commission’s key officials (including the European Commissioner for financial services, financial stability and Capital Markets Union Ms. Mairead McGuinness and her Cabinet), as well as relevant Members of the European Parliament and national finance ministries with the objective of ensuring that our key requests will get through the negotiations.
As a result of the actions we undertook both the final Council and Parliament texts maintain and extend most of the European Commission’s proposals for leasing. This outcome is a major win for our industry as the agreements keep the transitional arrangement that provides a capital discount for leasing under the Internal Ratings-Based IRB approaches, which will mitigate the impact of the introduction of an output floor whose objective is to limit capital gains for IRB institutions. This means that for the first time in the European prudential regulatory framework there will be a distinction of movable leasing vs unsecured loans.
We are also following-up with legislators on the expected mandate for a European Banking Authority report to assess what would be the right calibrations for leasing.