An adequate capital base both in terms of quantity and quality stabilises not only the institutions themselves but also the banking system as a whole. In this context, the Capital Adequacy Directive lays down an EU-wide foundation, which relates to market risks.
In the course of the further development of the Directive, banks were given the option, as an alternative to the prescribed standard procedure for computing the required capital backing of market-price risks, of using their own risk-management models, subject to certain conditions.