EU Capital Requirements Regulation (Regulation (EU) No 575/2013)
The EU Capital Requirements Regulation that sets the prudential rules banks and covered investment firms must meet every day: the quality and quantity of own funds, risk-based capital ratios with the output floor, credit, market, operational and CVA risk approaches and their model governance, large exposure limits, liquidity coverage and stable funding ratios, the leverage ratio, supervisory reporting and public Pillar 3 disclosure.
EU Capital Requirements Regulation (Regulation (EU) No 575/2013) is a compliance framework from European Union (and EEA) with 9 domains and 39 controls. The largest domains are Part Eight: Disclosure by institutions – EU Capital Requirements Regulation (Regulation (EU) No 575/2013) (7 controls), Part Two: Own funds and eligible liabilities – EU Capital Requirements Regulation (Regulation (EU) No 575/2013) (7 controls), Part Three, Title I: Own funds requirements, initial capital and the trading book – EU Capital Requirements Regulation (Regulation (EU) No 575/2013) (6 controls). Every control below carries what it requires and what an assessor expects to see.
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Framework Domains (9)
Part Eight: Disclosure by institutions – EU Capital Requirements Regulation (Regulation (EU) No 575/2013)
| Code | Title |
|---|---|
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::431-432 | Disclosure governance: formal policy, verification and written attestation by the management body |
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::433-434 | Publish disclosures at the required frequency for the institution's category and submit them to EBA |
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::435 | Disclose risk management objectives, policies and governance, with the management body's adequacy declaration and risk statement |
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::437-447 | Disclose own funds, requirements, key metrics and the risk-specific information Part Eight lists |
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::449a | Disclose ESG risks: environmental, social and governance, physical and transition, and fossil fuel exposures |
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::450 | Disclose remuneration policy and practice for material risk takers |
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::451 | Disclose the leverage ratio and liquidity requirements |
Part Four: Large exposures – EU Capital Requirements Regulation (Regulation (EU) No 575/2013)
| Code | Title |
|---|---|
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::392-393 | Identify, manage, monitor, report and record all large exposures and groups of connected clients |
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::394 | Report every large exposure, the 20 largest and exposures of EUR 300 million or more, and the 10 largest to institutions and shadow banks |
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::395-396 | Keep each exposure within 25 % of Tier 1 (with the EUR 150 million rule for institutions) and report and cure any breach |
Part One: Scope, definitions and levels of application – EU Capital Requirements Regulation (Regulation (EU) No 575/2013)
| Code | Title |
|---|---|
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::6-11 | Comply on an individual basis, and on a consolidated basis as parent, with the data and controls consolidation needs |
Part Six: Liquidity – EU Capital Requirements Regulation (Regulation (EU) No 575/2013)
| Code | Title |
|---|---|
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::412 | Liquidity coverage: hold liquid assets covering 30-day stressed net outflows, meeting the operational requirements |
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::413 | Net stable funding ratio of at least 100 %, calculated overall and in significant currencies |
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::414 | Notify a liquidity shortfall at once, submit a restoration plan and report daily until compliance returns |
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::415 | Liquidity reporting: monthly LCR and quarterly NSFR in the reporting currency and separately in significant currencies |
Part Three, Title I: Own funds requirements, initial capital and the trading book – EU Capital Requirements Regulation (Regulation (EU) No 575/2013)
| Code | Title |
|---|---|
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::102-104b | Trading book boundary: documented policies, trading intent, annual internal audit, independent control and desks |
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::105 | Prudent valuation: independent valuation systems, daily revaluation and additional valuation adjustments |
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::92 | Meet the 4.5 %, 6 % and 8 % capital ratios at all times, with the total risk exposure amount floored at 72.5 % of the standardised amount |
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::92a | G-SII resolution entities: hold own funds and eligible liabilities of 18 % of risk exposures and 6.75 % of the leverage exposure |
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::93 | Keep own funds at or above the initial capital required at authorisation |
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::94 | Use the small trading book derogation only while monthly checks show business at or below 5 % of assets and EUR 50 million |
Part Three, Title II: Credit risk, credit risk mitigation and counterparty credit risk – EU Capital Requirements Regulation (Regulation (EU) No 575/2013)
| Code | Title |
|---|---|
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::107-141 | Standardised approach: assign exposures to the right class and apply the risk weights and credit assessments correctly |
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::143-150 | Use the IRB approach only with permission per exposure class, rating system and estimation approach, and seek approval for material changes |
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::169-185 | IRB rating systems: meaningful grades, complete data, use in practice, stress tests and annual validation of estimates |
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::189-191 | IRB governance: management body approval, independent credit risk control unit and annual internal audit |
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::192-241 | Credit risk mitigation: recognise only legally effective, enforceable protection supported by written legal opinions |
Part Three, Titles III to VI: Operational, market, settlement and CVA risk – EU Capital Requirements Regulation (Regulation (EU) No 575/2013)
| Code | Title |
|---|---|
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::312-322 | Operational risk own funds: business indicator component with a complete and accurate loss data set |
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::323 | Operational risk management framework: independent function, documented system, reporting, compliance routines and reviews |
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::325 | Market risk: calculate requirements under the permitted approach, with internal models only for approved trading desks |
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::381-386 | CVA risk: calculate own funds for all covered transactions under the permitted approach and recognise only eligible hedges |
Part Two: Own funds and eligible liabilities – EU Capital Requirements Regulation (Regulation (EU) No 575/2013)
| Code | Title |
|---|---|
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::26-28 | Count as Common Equity Tier 1 only qualifying instruments and reserves, with permission before classification |
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::36-49 | Make the Common Equity Tier 1 deductions, including the backstop for insufficient coverage of non-performing exposures |
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::51-55 | Additional Tier 1 instruments: perpetual, fully discretionary, loss-absorbing at a 5.125 % trigger |
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::62-64 | Tier 2 instruments: at least five years' maturity, subordinated, and amortised over the final five years |
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::72a-72l | Eligible liabilities of resolution entities: qualifying instruments, deductions and the own funds and eligible liabilities total |
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::77-78 | Obtain prior permission before reducing, calling, redeeming or repurchasing own funds or eligible liabilities instruments |
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::89-91 | Limit qualifying holdings outside the financial sector to 15 % of eligible capital each and 60 % in total |
Parts Seven and Seven A: Leverage and supervisory reporting – EU Capital Requirements Regulation (Regulation (EU) No 575/2013)
| Code | Title |
|---|---|
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::429 | Leverage ratio: Tier 1 over the total exposure measure, at least 3 %, plus the G-SII buffer |
| eu-capital-requirements-regulation-regulation-eu-no-575-2013::430 | Supervisory reporting: own funds, large exposures, liquidity, leverage, asset encumbrance, property markets, ESG and crypto-asset exposures |
What is EU Capital Requirements Regulation (Regulation (EU) No 575/2013) and who does it apply to?
EU Capital Requirements Regulation (Regulation (EU) No 575/2013) is a compliance framework from European Union (and EEA) with 9 domains and 39 controls. The EU Capital Requirements Regulation that sets the prudential rules banks and covered investment firms must meet every day: the quality and quantity of own funds, risk-based capital ratios with the output floor, credit, market, operational and CVA risk approaches and their model governance, large exposure limits, liquidity coverage and stable funding ratios, the leverage ratio, supervisory reporting and public Pillar 3 disclosure. It is used by organisations to establish and maintain compliance with industry standards and regulatory requirements.
What does EU Capital Requirements Regulation (Regulation (EU) No 575/2013) actually require?
EU Capital Requirements Regulation (Regulation (EU) No 575/2013) has 39 controls organised across 9 domains. The largest domains are Part Eight: Disclosure by institutions – EU Capital Requirements Regulation (Regulation (EU) No 575/2013) (7 controls), Part Two: Own funds and eligible liabilities – EU Capital Requirements Regulation (Regulation (EU) No 575/2013) (7 controls), Part Three, Title I: Own funds requirements, initial capital and the trading book – EU Capital Requirements Regulation (Regulation (EU) No 575/2013) (6 controls). Each control defines specific requirements that organisations must implement to achieve compliance.
If I already comply with another framework, how much of EU Capital Requirements Regulation (Regulation (EU) No 575/2013) do I already cover?
EU Capital Requirements Regulation (Regulation (EU) No 575/2013) does not currently have cross-framework mappings in our system. Check back as we continuously expand our mapping database.
How do I implement EU Capital Requirements Regulation (Regulation (EU) No 575/2013)?
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