Legal Framework for Financial Hybrids in the Banking Industry

Abstract

Prudent capital requirements are set out in the CRD IV package – the fourth Capital Requirements Directive and Capital Requirements Regulation. These requirements are based on internationally accepted principles of Basel III. They preserve the level playing feld inside the Single Market by achieving a Single Rule Book for all banks in the EU. Financial hybrids play an important role in the tier-based capital structure imposed by the CRD IV package, which will be examined in detail below.