Publication: Working Paper Series No. 155

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“Options and Discretions under the Capital Requirements Directive IV” by Christos Gortsos (National and Kapodistrian University of Athens) was published on 12 September 2023 in the EBI Working Paper Series No. 155.

The paper analyses the options and discretions (O&Ds) available to Member States, national competent authorities (NDAs), national designated authorities (NDAs), the EBA and the ESRB under the CRD IV (as in force). It is structured in three Sections.

Section 1 sets the scene, discussing the evolution of the CRD IV, the system of its rules, the significant role of EBA Guidelines in respect of options and discretions, as well as the relationship to the Single Supervisory Mechanism Regulation (SSMR), with specific emphasis on the provisions of Article 4(3) SSMR on the application of national law by the ECB within the SSM and the ECB legal acts, legal instruments, and policy documents (Guides) in relation to the exercise of options and discretions.

Section 2 develops, in a systematic way, on the individual O&Ds under the CRD IV, which relate, respectively, to six broad aspects: competent authorities, requirements for access to the activity of credit institutions, freedoms to establish and provide services and relations to third countries; the principles of prudential supervision; the supervisory review processes; supervision on a consolidated basis; financial holding companies, mixed financial holding companies and mixed-activity holding companies; and capital buffers.

Finally, Section 3 summarises on the O&Ds of Member States, NCAs, NDAs, the EBA and the ESRB, followed by a final assessment.

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