CRD V holdco plans are political not substantive

Author: Tom Young | Published: 23 Nov 2016

The European Commission's proposals for Capital Requirements Directive (CRD V) have been deemed by some as a retaliatory response to US regulatory standards. But Clifford Chance's Simon Gleeson believes the proposals will not substantially damage US banks with operations in the EU.

The Commission’s package was announced on November 23 and includes proposals on total loss-absorbing capacity (TLAC) and minimum requirement for own funds and eligible liabilities (MREL).

And while many industry participants have welcomed the proposals, particularly a binding stable funding and leverage ratio requirement, others have voiced concern over the treatment of foreign banks under the rules.

The proposals mirror US intermediate holding company rules that ring-fence foreign bank...