The Capital Requirements Directive V (CRDV) is a key regulatory framework that strengthens financial stability in the European Union. It is part of the broader Basel III reform package, ensuring that banks maintain adequate capital buffers, sound liquidity, and robust risk management practices. CRDV introduces higher capital conservation buffers, enhances supervisory review processes, and strengthens corporate governance measures within financial institutions.
The directive ensures that European banks remain resilient against financial shocks while maintaining a level playing field. Institutions under CRDV must comply with enhanced transparency requirements, particularly in areas related to risk-weighted assets, leverage ratios, and funding stability.
