The Council of the EU has announced that it has reached provisional political agreement with the EP on the proposed Directive amending CRD IV as regards supervisory powers, sanctions, third-country branches and ESG risks (CRD VI) and the proposed Regulation amending the CRR as regards requirements for credit risk, credit valuation adjustment (CVA) risk, operational risk, market risk and the output floor (CRR III). Under the provisional agreement, negotiators agreed: (i) how to implement the socalled ‘output floor’, limiting banks’ variability of capital levels computed by using internal models, and the appropriate transitional arrangements to allow sufficient time for market players to adapt; (ii) to make improvements to the areas of credit risk, market risk and operational risk; (iii) to provide for additional proportionality in the rules, in particular for small and noncomplex institutions; (iv) to include a harmonised ‘fit and proper’ framework for assessing the suitability of members of the institutions’ management bodies and key function holders and rules to safeguard supervisory independence; (v) a transitional prudential regime for cryptoassets and amendments to enhance banks’ management of ESG risks; and (vi) to harmonise minimum requirements applicable to branches of third-country banks and the supervision of their activities in the EU. The agreement has been agreed ‘ad referendum’ and still needs to be confirmed by the Council and the EP before it can be formally adopted.