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Speech: Chris De Noose on Proportionality

Speech: Chris De Noose on Proportionality


Remarks by 

ESBG Managing Director Chris De Noose​

to the

ESBG Proportionality Workshop

Brussels, Belgium

​24 January 2017


​Good morning ladies and gentlemen and thank you for joining us today for our workshop on proportionality. Over the last few years, the European banking sector has been recovering from the economic and social crisis and we have all been working hard to restore public trust in financial institutions and increase growth and jobs in Europe, including the European Commission, Parliament and Member States, helped by the EBA, ECB and national competent authorities.

​The workstream that followed has resulted in a wave of new and updated legislation which has mostly taken a ‘one-size-fits-all approach. Locally-focused savings and retail banks represented by ESBG – the European Savings and Retail Banking Group – have long called for proportionality as a way to achieve better regulation. Better regulation allows financial institutions to carry out their daily activities, such as SME lending, under a non-detrimental regulatory framework which increases the strength of the European banking sector.

A little over a year ago, ‘Proportionality in bank regulation – a report by the EBA Banking Stakeholder Group’ was published, and during our event last January we encouraged legislators to carefully consider the principle of proportionality throughout their work. For those who wish to read the report, there are copies available on the table outside the meeting room. 

Now, Europe’s savings and retail banks are calling on the European Commission to include with even more ambition the principle in their work, particularly during this period when the CRR and CRD IV are under review. These reviews are very much welcomed by ESBG’s members, and we hope that proportionality will continue to be a key thread for these reviews and for future regulation.

ESBG argues that proportionate banking rules should account for factors such as an institution’s size, business model and interconnectedness. This is the cornerstone of our ESBG task force on proportionality’s discussion and what we are going to discuss at length all together this morning. We are convinced that there needs be greater political awareness of proportionality, so that all politicians understand the concept and the reasons behind the proportionality argument. Proportionality should be enshrined at Level 1, and it should be ensured that Level 2 abides by Level 1 legislation. In addition, proportionality should be applied in accordance with the Single Rule Book spirit, but without neglecting the subsidiarity principle which remains key in the EU Treaties. In addition, ESBG is advocating for a more prudent approach than the one-dimensional, size-only differentiation chosen by US regulators.

We will have two panels today; one on the Political Aspects of Proportionality and the other on the Practical Aspects of Proportionality. The panellists come from a diverse background – which emphasises even more that proportionality is not a concern faced only by banks but also by employees and consumers. It also means that proportionality is no longer just a concern – ​it became a hope.​


Proportionality