Capital Requirements Directive IV

The Capital Requirements Directive IV (CRD IV) is a European Union regulation that sets rules for banks to ensure they hold enough capital to cover their risks. This is crucial for maintaining financial stability, especially during economic downturns. It aims to protect depositors and the economy by requiring banks to have a certain amount of high-quality capital relative to their assets, limiting risky lending practices. CRD IV also enhances transparency and sets requirements for risk management and corporate governance within banks, contributing to a safer banking environment in the EU.