The proposal presented by the European Commission intends to change the behaviour of the 8,000 banks that operate in Europe. Its main goal is to strengthen the resilience of the EU banking sector while ensuring that banks continue to finance economic activity and growth. The proposal is based in three concrete objectives.

The European Commission presented a proposal with three concrete goals inside. The first one is requiring banks to hold more and better capital to resist future shocks by themselves. With its proposal, the Commission wants Europe will lead this matter, applying these rules to more than 8,000 banks, amounting for 53% of global assets. This is not the first revision of the legislation; in 2008, the Commission presented another proposal to revise the Capital Requirements Directive.

With the second objective, the Commission wants to set up a new governance framework giving supervisors new powers to monitor banks more closely and take action through possible sanctions when they spot risks. The third and the last goal is putting together all legislation applicable on this matter and proposing a Single Rule Book for banking regulation. According to the Commission, this will improve both transparency and enforcement.

On the other hand, the Commission also seeks to reduce to the extent possible reliance by credit institutions on external credit ratings by: a) requiring that all banks' investment decisions are based not only on ratings but also on their own internal credit opinion, and b) that banks with a material number of exposures in a given portfolio develop internal ratings for that portfolio instead of relying on external ratings for the calculation of their capital requirements.

The proposal contains two parts divided into a directive governing the access to deposit-taking activities and a regulation governing how activities of credit institutions and investment firms are carried out. Moreover, the proposal is accompanied by an impact assessment which demonstrates that this reform will significantly reduce the probability of a systemic banking crisis. The Commission's proposal replaces the former Capital Requirements Directives and constitutes another major step towards creating a sounder and safer European financial system.