Policy focus: ​​​​​​​​​​​​​​Capital Requirements
Savings & retail banks should be subject to adjusted requirement.


















BRUSSELS, 12 April 2017 ​ It is of crucial importance that the EU framework takes into account the specificities of credit institutions to a gre​​ater extent while implementing Basel III, allowing for a certain degree of differentiation. Savings and retail institutions should be subject to adjusted requirements in accordance with their business model in order to safeguard their financing capacity.

Avoid one-size fits all approach
In light of the new legislation, ESBG has advocated that the original one-size-fits-all approach was not appropriate, as this may cause difficulties for savings and retail financial institutions in Europe, in particular to account for specific characteristics of savings banks. Indeed, the introduction of stricter prudential requirements will inevitably have repercussions on the capacity for institutions to finance the real economy, and in particular on SMEs which play a crucial role in the development of sustainable growth and job creation in the European Union. As SMEs depend on loans for the majority of their financing, they would suffer significantly from a rise in the cost of credit, which would result in slowing their investments and efficiency.

This is why, in order to preserve the diversity of the European banking landscape, it is indispensable to keep ensuring that institutions' specificities are taken into account within the implementation of the CRD V ​package and its future developments through a proportionate application of its provisions according to institution size and complexity and the riskiness of their activities. This has been achieved, in particular through the acknowledgement of particular instruments as Core Equity Tier 1, the recognition of specific structures for deductions, and a decrease (still provisional) in the risk weights associated with SMEs.

Even though realism has prevailed and most of our concerns have been taken on board, much remains to be worked out in the near future both at international and European levels, in particular with regards to the calibration of the leverage ratio and the review of risk weights.

>> Learn more about ESBG's position on capital requirements



Capital Requirements Directive and Regulation; Proportionality; European Institutions; European Supervisory Authorities (EBA-ESMA)