This chapter, structured in three sections, discusses an aspect of significant importance in relation to sustainable finance under EU secondary law: the gradual shift from capital markets to banking regulation. Section 21.1 sets the scene, by briefly overviewing the initiatives of (mainly) the (European) Commission in relation to sustainable finance – which are mainly related to EU capital markets regulation, albeit with an impact on credit institutions as well – and the rules adopted by the European Parliament and Council during the period 2019–2021. The focus of the following section 21.2 is on the legislative proposals submitted by the Commission in 2021 to amend the CRD IV and the CRR in relation to sustainability and contribution to the green transition. After a general overview of this legislative ‘banking package’ and some introductory remarks on the proposed amendments (including the harmonised definitions of the ESG-related risks by amendment of the CRR), this section presents the key proposed new rules (by amendment of the CRD IV) which relate to governance issues, ESG risks, the supervisory review and evaluation process (SREP) and the enhanced competent authorities’ powers, as well as the (further) amendments proposed to the CRR. Section 21.3 contains the concluding remarks.