The statement sent on 7 January to legislators, calls on the EU Commission to go further in focusing on proportionality as it is finalising the Basel III implementation. As pointed out, forcing smaller and less complex banks to adopt administrative burdens that were originally designed to regulate large global players, with completely different risk profiles, is having a negative effect not only on the banks themselves, but also their employees and in the end customers. By requiring employees to spend ever more time dealing with compliance requirements, they have less time to meet with clients and face increasing levels of stress and burnout.
ESBG, UEF and SME United is hence making the case, that developing different regulatory regimes for different banking models would help them stay competitive and viable, while ensuring that they are subjected to an appropriate level of scrutiny commensurate with their size and risk profile.
This would also ensure that the European banking sector remains diverse in terms of business models, which the Commission itself has acknowledged is less and less the case in Europe. Not only does a healthy and diverse sector ensure that there are good options for each type of customer, but it also ensures that the banking system as a whole in Europe is more resilient in case of future financial crisis.
It is therefore the hope that the Commission will give this statement due consideration and will focus on developing more proportionate rules.
The statement, which you can read below, will be followed by an event later in the year in Brussels, bringing together legislators and stakeholders to further discuss the matter.