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Do banking rules need to be complex?

Do banking rules need to be complex?

A message from ESBG: applying the principle of proportionality

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​16 March 2016

​​​​​​The following piece is a message from ESBG that appeared in today's Morning Exchange.

Banking legislation and regulation is complex. Does it have to be? Maybe not always. 

Taking a tier-based approach at every step of the rulemaking process can work and bear fruit when it comes to efficiency. Guided by proportionality, policy can pave the way for locally-focused banks which aim to finance the real economy. The payoff: EU growth and the jobs Europeans crave.   

Level playing field: needed more than ever

A level playing field in banking is needed more than ever. To get there, rules need to be tier-based, proportionate, to reflect the diverse financial landscape. Applied at every step of the legislative and regulatory process, proportionality can especially help spur locally rooted banks to play an even more vital role – especially for SMEs and households. Savings and retail banks are better off without a “one size fits all” approach. 

Local communities that savings and retail banks serve already recognise that. They see the value of proportionality. Awareness is growing among policymakers too

Isn’t it time we further implement it? 

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Proportionality; SME finance; Capital Markets; Capital Markets Union; European Institutions; European Supervisory Authorities (EBA-ESMA); Communication - institutional & commercial