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Viewing proportionality under scholarly lens

Viewing proportionality under scholarly lens

ESBG Managing Director Chris De Noose presents the perspective of retal and savings banks

​​​​​​Policymakers, researchers, banking industry debate need for principle

​BRUSSELS, 12 March 2018 – More than 100 participants took part on 7 March at a conference called “Fostering a diversified banking market through proportionality" in Brussels. The European Banking Institute (EBI) event on proportionality, co-organised by the European Savings and Retail Banking Group (ESBG) and the European Banking Federation (EBF), was hosted at the Single Resolution Board (SRB).

Divided into three sessions, the event focused on reflections around the concept of proportionality and the principle of proportionality in regulation and supervision. These topics were discussed by professors from several European universities and research institutions as well as representatives from the financial industry, supervisory authorities and policymakers.

The perspective of retail and savings banks was presented by ESBG Managing Director Chris De Noose. “How could we ensure the stability of EU banks whilst still making sure they had adequate lending capabilities? The answer? Proportionality," started his opening remarks De Noose (full speech can be found here).

De Noose also emphasized that there is still more that should be done so that Europe's savings and locally-focused retail banks can continue to be key players in ensuring that EU citizens have access to finance. According to him, activities which do not pose a risk to the financial system should not be subject to the same risk reduction measures as those which could destabilise the system. Ensuring the diversity of the banking systems and looking at the social and sustainable role of a bank should also be taken into consideration when discussing financial regulation measures.

Astrid Engel Thomas, Head of Legal Department at the Danish local and savings banks' association (LOPI), which is also a member of the ESBG, presented specific examples of challenges related to financial regulation.​ She called for less administrative burden on local banks and emphasized that “one size fits all" is not workable in practice.

This idea was also repeated by Markus Ferber, Vice Chair of the Committee on Economic and Monetary Affairs at the European Parliament. He added that same rules does not mean same efforts. Although the rules applied to banks are the same, this does not mean that the efforts required from them are the same.

The conference ended with a debate on proportionality in supervision. Thomas Gstaedtner, in his role as Head of Division at Directorate General Micro-Prudential Supervision II at the European Central Bank, stated that there should be a combination between prudential soundness and maintaining a level playing field. Other speakers such as Isabelle Vaillant, Director of regulation at the European Banking Authority, stressed that supervision is still a forward-looking territory to conquer and that transparency will be crucial to achieving proportionality.

>>Full speech of ESBG Managing Director Chris De Noose

>>More information about the event


Proportionality; Supervision; Regulation; Financial supervision