Capital Adequacy Directive

The Capital Adequacy Directive is a European directive that aims to establish uniform capital requirements for both banking firms and non-bank securities firms.

The original 93/6/EEC ('CAD1') directive was amended by 98/31/EEC ('CAD2'), to incorporate banks' own estimate of capital using value-at-risk techniques.

Annex 1 models were virtually unchanged by CAD2, so there has been no change in the CAD1 regime.