Implementation of the CRD rules
The CRD rules were implemented in Danish law with effect from January 1, 2007. This completes the long process from idea to law.
There is one exception though: the most advanced method for credit risk (advanced IRB) may not be implemented until January 1, 2008.
IRB application
In September 2006, the Danske Bank Group submitted its IRB application to the Danish SFA. The application will form the basis for ongoing discussions between the Group and the Danish FSA during 2007 about the Group’s risk and capital management.
As part of Pillar I, the CRD allows institutions to apply for permission to use their own models for calculating exposure on derivatives, repo-style transactions and other transactions. The use of own models for these types of exposure was not included in the FSA requirements that formed the basis for the application the Danske Bank Group submitted in September. Permission to use own models for these exposures must be applied for separately. The Danish FSA has recently sent out its requirements for this application. The Danske Bank Group will submit this application at some later time.
The Danske Bank Group operates in several countries
The Danske Bank Group is incorporated in a number of EU and EEA countries. These operations are comprised by the application submitted to the Danish FSA. The Danish FSA is responsible for coordinating the application process with the other national supervisors which may impose special requirements on a branch or subsidiary located in their area. This may affect the process, but the Danish FSA has the final word in deciding whether or not to approve the application.
The CRD permits a number of national choices, for example the choice to lay down a minimum overdue threshold of 90 days. These choices may make the playing field bumpy instead of level. National choice also affects the Internal Capital Adequacy Assessment Process (ICAAP), which to a large extent is based on dialogue between supervisor and institution.
The Accord Implementation Group (AIG) and the Committee of European Supervisors (CEBS) were established to provide fora for co-operation between the national supervisors to further common interpretation of the new rules.
Transparency
The Danske Bank Group has come a long way towards informing its stakeholders – shareholders, supervisory authorities, rating agencies and customers – about the Group's risk and capital management. The Danish FSA demands that information about IRB models be published from 2008.
Timeline
| 2010 |
End of transition period for the first institutions |
| 2008 |
CRD allows use of advanced methods |
| 2007 |
Parallel reporting by institutions: both under existing and under new capital adequacy rules |
| 2007 |
The Danish FSA decides on the first IRB and AMA applications |
| 2007 |
CRD takes effect |
| 2006 |
The Danish FSA receives the first IRB and AMA applications |
| 2006 |
The Danish FSA starts formal consultation process regarding its executive order |
| 2006 |
The Danish FSA publishes the first draft of its executive order |
| 2005 |
The Basel Committee and the EU Commission publish stricter requirements regarding counterparty risk |
| 2005 |
The EU adopts the CRD |
| 2004 |
The EU Commission sets up the Committee of European Supervisors (CEBS) |
| 2004 |
The Basel Committee establishes the Accord Implementation Group (AIG) |
| 2004 |
The United States decides to postpone Basel II implementation |
| 2004 |
The Basel Committee adopts Basel II |
| 2003 |
The United States decides to limit Basel II implementation to the largest international banks |
| 2002 |
The EU Commission publishes its first CRD draft |
| 2001 |
The Basel Committee conducts the first Quantitative Impact Study on the Basel II rules |
| 1999 |
The Basel Committee publishes its first Basel II draft |
Last updated/revised on January 02, 2007