Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, what estimate he has made of the cost to UK firms of implementing Capital Requirement Directive IV.

The Capital Requirements Directive IV (CRD IV) implements, in the EU, the prudential banking standards agreed by the international Basel Committee. The Government supports these global standards to ensure that we do not again face severe economic impacts as a result of inadequate banking regulation and would have implemented these with or without EU legislation.

It is difficult to isolate the costs and benefits from other prudential banking measures introduced since the global financial crisis. And the benefits in particular are hard to capture as they take time to materialize. However, the Prudential Regulation Authority (PRA) stated in its cost-benefit analysis carried out 2013 that ‘the CRDIV package is net beneficial to the UK economy.’

Taking all of the prudential measures together, the PRA has estimated that the net economic benefit is £8.25bn per annum.