Capital Requirements Directive

The Capital Requirements Directive (CRD) is a set of regulations in the European Union that aims to ensure banks maintain sufficient capital reserves to absorb losses and promote financial stability. It specifies the minimum amount of capital banks must hold based on their risk exposure, helping prevent bank failures that could impact the economy. By mandating strong financial buffers, the CRD aims to protect depositors and promote confidence in the banking system, ultimately contributing to safer and more stable financial markets.