Publication

This paper describes how after seven years of difficult negotiations, the Capital Requirements Directive (CRD) was finally approved by the EU Council of Ministers in October 2005. The author details how the legislation transposes the complex, risk-sensitive Basel II framework designed by the Basel Committee into EU law and explains how the CRD will apply to all credit institutions and investment firms operating in the 25 member states from January 2007 onwards. The author also lists several open issues that will affect the successful implementation of the CRD.