Recital 1

(1)Regulation (EU) No 575/2013 of the European Parliament and of the Council ⁴ establishes, together with Directive 2013/36/EU of the European Parliament and of the Council ⁵ , the prudential regulatory framework for credit institutions and investment firms (‘institutions’) operating in the Union. Adopted in the aftermath of the financial crisis that unfolded in 2007-2008, and largely based on international standards agreed in 2010 by the Basel Committee on Banking Supervision (BCBS), known as the Basel III framework, that prudential regulatory framework has contributed to enhancing the resilience of institutions operating in the Union and to making them better prepared to deal with potential difficulties, including difficulties stemming from possible future crises.