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Proportionality: Less risk must lead to less bureaucratic burdens

Proportionality: Less risk must lead to less bureaucratic burdens


​​​​​Financial stability topic in ESBG brochure

>> Read related ESBG policy brochure​​​ | En français​​

BRUSSELS, 27 March 2019

The following is an excerpt from the recently released brochure 'Together for a growing and more integrated europe: Savings and retail banks’ drive to help Europeans prosper​'.

It is crucial that current and new legislation is applied in a proportionate way to all financial institutions. That means policy that takes into account a bank’s size, the nature of their activities, complexity and business model (such as savings, retail, private and cooperative banks).

​Proportionality is needed because savings and retail banks as members of ESBG have had to adapt to administrative burdens that were originally designed to regulate large global players with a completely different risk profile. With this in mind, and in the interest of effective and efficient banking regulation, the principle of proportionality has to be recognised and used at every step of the legislative and regulatory process so that existing and new legislation and regulations are applied to banks and financial institutions in a proportionate way. 

Different regulatory regimes for different banking models would help local and regional banks to compete on an equal footing while ensuring compliance with standards being set at international level and help by curtailing the increasingly distortional effects of regulation. This would allow for a level playing field, promote growth – and therefore increase jobs – and in turn contribute at EU level to the further development of the Single Market as well as to financial stability. It is vital that all banks are able to carry out daily, less-risky activities, to which more proportionate regulation can contribute. The big beneficiary of more proportionate regulation will be, inter alia, households and SMEs, who will have easier access to finance. ​

To learn more about the latest public policy positions on banking from ESBG, see the brochure: 

Proportionality; Financial supervision; Regulation; European Institutions; European Supervisory Authorities (EBA-ESMA)