Extensive revisions expected for EU CAD in July draft

Substantial changes in content will have occurred to the EU Capital Adequacy Directive (CAD) when the final EU Commission draft is published in July. And domestic European regulators are warning that further alterations will take place to the document when it is presented to the EU Parliament in September of this year.

The EU Commission published its feedback document to comments on the previous draft of the CAD in mid-March, and the document contained several potential changes to the CAD. To begin with, the EU Commission proposes to include text designed to provide that the "‘co-ordinating supervisor’ work jointly with the subsidiary supervisors to agree together the approval of such internal systems and models" used under either the credit risk or advanced measurement approach (AMA) frameworks, according