Technical note · Consulting firm
Basel 4: European Commission proposal for CRR3
The 2021 proposal is the origin of CRR3, now adopted: a good document for understanding where its changes come from.
- Organization
- KPMG
- Document date
- November 2021
- Type
- Technical note
- Language
- English
- Scope
- European Union
- Length
- 75 pages
What it contains
The KPMG presentation, from November 2021, summarizes the proposed amendments to the Capital Requirements Regulation (CRR3) that the European Commission published on 27 October 2021 within its banking package. That package has three parts: implementing the final Basel reforms (Basel 4), sustainability and stronger supervision. CRR3 corresponds to the first and seeks to implement Basel 4 faithfully, with adjustments for the characteristics of the EU banking sector.
The main changes cover the output floor, credit risk under the standardised and internal models approaches, credit risk mitigation, own funds, market risk, credit valuation adjustment (CVA) risk, operational risk, disclosures, the integrated supervisory reporting system, ESG risks, the leverage ratio and minimum haircuts on securities financing transactions. For example, in operational risk the existing approaches are replaced by a single non-model-based approach, and in credit risk the standardised credit risk assessment approach (SCRA) is introduced alongside the external ratings approach.
It should be read as a document of its date: the Commission’s proposal planned to apply the new rules from 1 January 2025, and the final text was adopted in 2024 as Regulation (EU) 2024/1623, applying in essence from January 2025. The European Central Bank includes in its 2026-28 supervisory priorities the new output floor and the greater weight of the standardised approach.
Why it matters for risk management
It helps to trace the origin of the Basel 4 capital changes and to understand why the output floor and the standardised approach are today pillars of European supervision. It is a proposal prior to the final text; for obligations in force, consult the regulation as adopted.
No official page for this presentation was found; the copy that the Club originally published on this site is linked.
Summary prepared by the Dominican Republic Risk Management Club from a reading of the original document, with the source verified on 7 October 2026. It does not replace reading the official text and is not advice.
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