Third, euro area countries have taken a series of measures to address balance sheet weaknesses in the banking sector. Capital requirements are in the process of being strengthened following the conclusion of the Capital Requirements IV Directive, which  BIS central bankers’ speeches  3  transposes the Basel III agreement into EU law.
At the same time, a number of banks raised new capital to address balance sheet weaknesses. The greatest progress in financial sector repair has of course taken place in the countries under EU-IMF programmes, where there has been a comprehensive restructuring and recapitalisation of the domestic banking sectors.