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CRR/CRD IV: the trees and the forest

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  • Rainer Masera

    () (Universita' degli Studi Guglielmo Marconi)

Abstract

This paper offers a review of the new CRR/CRD IV capital regulatory framework for banks in the EU, which represents the transposition into European law of the Basel III standard. Major shortcomings of the Second Capital Accord are examined, and the repair work is assessed in the light of the recognised need to amend the flaws. It is argued that the necessary adjustments must be evaluated in the holistic framework provided by the Banking Union approach. The main features of the new system are reviewed as components of an interconnected, complex network. The critical analysis highlights the significant improvements with respect to the Basel II standard, but it also brings to the fore the weaknesses which continue to characterise the new capital regulatory framework.

Suggested Citation

  • Rainer Masera, 2014. "CRR/CRD IV: the trees and the forest," PSL Quarterly Review, Economia civile, vol. 67(271), pages 381-422.
  • Handle: RePEc:psl:pslqrr:2014:42
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    File URL: http://ojs.uniroma1.it/index.php/PSLQuarterlyReview/article/view/13030/12837
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    References listed on IDEAS

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    Cited by:

    1. Aikman, David & Haldane, Andrew & Hinterschweiger, Marc & Kapadia, Sujit, 2018. "Rethinking financial stability," Bank of England working papers 712, Bank of England.

    More about this item

    Keywords

    capital regulation; Basel III; risk; Banking Union; Modigliani-Miller;

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G13 - Financial Economics - - General Financial Markets - - - Contingent Pricing; Futures Pricing
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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