A skyline view of Frankfurt’s central business district

Prospects for two-tiered banking regulation in Europe

  • EU banking regulations are complex and expensive to comply with
  • This situation inherently favors large banks, which can absorb the costs
  • Some regulators argue for a second, lighter set of rules for smaller lenders
  • Creating such a framework would challenge the push for a “unified” system

Over the past two years, European Union authorities have begun considering the issue of “proportionality” in banking regulation and supervision. The question is whether to continue the current one-size-fits-all approach. Should regulators impose the same rules across the entire spectrum of financial institutions or adapt rules to the specifics of banks – their size, complexity and relevance for financial stability? The idea is that smaller, less risky banks should be subject to simpler rules than the large, globally active, systemically important ones.

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Professor Elisabeth Krecké
For many years, small lenders have formed the backbone of banking in most European countries
read more about it in the report
What's inside
  • EU banking regulations are complex and expensive to comply with
  • This situation inherently favors large banks, which can absorb the costs
  • Some regulators argue for a second, lighter set of rules for smaller lenders
  • Creating such a framework would challenge the push for a “unified” system
Who will benefit?
  • Report is targeted to the decision makers in cross country manufacturing – suppliers, manufacturers, logistics.
  • Also considered useful for the administrative university facilities, to better understand the possibe effects of current decisions.
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