The impact of bank capital regulation on financing the economy: Comments on the public consultation of the European Commission on the possible impact of the CRR and CRD IV

摘要

The Global Financial Crisis as well as the Eurozone Banking and Sovereign Debt Crisis revealed deficiencies in bank capital regulation which made banks vulnerable to stress in interbank markets as well as to stress in sovereign debt markets. Deterio-rating banks' balance sheet quality weakened the loan supply. Especially loans to small and medium-sized enterprises within the EU became restrictive. Among reform-ing bank supervision, the European Commission strengthened bank regulation by applying the Basel III recommendations to European law in form of the Capital Re-quirements Regulation (CRR) and the Capital Requirements Directive IV (CRD IV). A public consultation on the effects of CRD IV and CRR is taking place until October 7th of this year. [...]