The Global Financial Crisis as well as the Eurozone Banking and Sovereign Debt Crisis revealed deficiencies in bank regulation which made banks vulnerable to stress in interbank markets as well as to stress in sovereign debt markets. Deteriorating banks' balance sheet quality weakened banks’ loan supply. Especially loans to small and medium-sized enterprises became restrictive during these times of stress. Among reforming bank supervision, the European Commission strengthend bank regulation by applying the Basel III recommendations to European law in form of the Capital Requirements Regulation (CRR) and the Capital Requirements Directive IV (CRD IV). CRR and CRD IV require banks to increase the quality and the quantity of their equity capital base. Moreover, it sets new standards for banks' liquidity holdings as well as for their funding base. Reforms are based on the fact that banks, which faced the most severe problems during crisis times, were undercapitalized and relied too much on short-term wholesale market funding. However, it must be acknowledged that banks, which fared more well during stress times, had a larger capital base and a more stable funding base. Although the different bank business models fared differently well or poorly during stress times, CRR and CRD IV apply to all European banks equally. The basic question arising here is: if CRR and CRD IV made banks more stable and fostered a more stable loan supply, or if the regulatory measures lead to a lower capacity of banks to lend to the real economy.

The European Parliament and the Council introduced review clauses into the text of the CRR, which mandate the Commission to conduct an analysis of how the provisions of CRR affect banks’ capacity to finance the economy. The public consultation runs until October 7th, of 2015 and aims to address (European Commission, 2015) the following aspects:

  • the role of CRR and CRD IV in bank recapitalisation,
  • the impact of CRR and CRD IV on bank lending in general,
  • the impact of CRR and CRD IV on lending to small and medium-sized enterprises,
  • the impact of CRR and CRD IV on lending to infrastructure projects,
  • the proportionality, i.e. how CRR and CRD IV affects different bank business models,
  • the scope for simplification, and the single rulebook.

The Cologne Institute for Economic Research (IW Köln) takes part in the consultation by answering the Commission’s consultative document.

Response to the Commission's DG FISMA Consultation Paper

Markus Demary / Heide Haas: Comments on the Public Consultation:
The Possible Impact of the CRR and CRD IV on Bank Financing of the Economy

IconDownload | PDF

Ansprechpartner

Veranstaltung
Veranstaltung, 11. Mai 2017

19. Finanzmarkt Round-Table Die Rückkehr der Inflation – Zwischenspiel oder neue Bedrohung?Arrow

Nach einer langen Phase sinkender Inflationsraten und Deflationsgefahren scheint die Inflation auf dem Wege der Normalisierung – oder ist dies nur ein Zwischenspiel und hohe Inflation wird zur neuen Bedrohung für die Eurozone? Diskutieren Sie mit uns – beim 19. Finanzmarkt Round-Table in Frankfurt am Main. mehr

24. März 2017

Interview „Der Braindrain ist das größte Problem“Arrow

Am Sonntag wählt Bulgarien, das ärmste EU-Mitgliedsland, ein neues Parlament. Galina Kolev, IW-Expertin im Kompetenzfeld Internationale Wirtschaftsordnung und Konjunktur, wurde in der bulgarischen Hauptstadt Sofia geboren. Mit dem iwd sprach Sie über die Probleme und Chancen ihres Heimatlands. mehr auf iwd.de

24. März 2017

Europäische Union 60 Jahre Römische VerträgeArrow

Die Europäische Union blickt auf 60 Jahre wirtschaftliche Zusammenarbeit zurück. Ansätze einer politischen Integration sind sogar noch älter, scheiterten aber am französischen Parlament. Mittlerweile wäre es allerdings an der Zeit, in der Sicherheits- und Verteidigungspolitik enger zu kooperieren. mehr auf iwd.de