Stability, Flexibility and Proportionality: Towards a Two-Tiered European Banking Law?

33 Pages Posted: 23 Feb 2018 Last revised: 28 Feb 2018

See all articles by Bart Joosen

Bart Joosen

VU University Amsterdam; European Banking Institute

Marco Lamandini

University of Bologna - Department of Business Law

Matthias Lehmann

University of Bonn

Kitty Lieverse

Loyens & Loeff N.V.; Radboud Universiteit Nijmegen; EBI | European Banking Institute

Ignacio Tirado

Universidad Autónoma de Madrid; European Banking Institute

Date Written: February 21, 2018

Abstract

The banking regulatory framework adopted by the European Union is both stern and unidimensional. Proportionality in banking regulation and supervision is mainly a theoretical reference, with little or no practical implementation. On the face of it, the fundamental choice to apply the Basel standards to every European bank, no matter the size, systemic relevance or complexity, would seem to provide certainty and hence stability for the benefit of the whole banking sector. However, the “one size fits all” approach hinders the development of smaller banks by creating competitive distortion. This papers purports to provide ideas that will relax the system and, based on an ad hoc, bespoke assessment, will provide for flexibility and proportionality for a key part of the banking sector, while maintaining stability. The paper contains a proposal for criteria to make a proper distinction between “small” (tier 2) and “large” (tier 1) banks in this context. It also provides the contours of the manner in which the rules applying to the tier 2 banks should be determined.

Keywords: Banking supervision, Single Rule Book, Capital Requirements, Liquidity Requirements, Basel Committee Standards, Proportionality, Financial Stability, Capital Requirements Regulation

Suggested Citation

Joosen, Bart and Lamandini, Marco and Lehmann, Matthias and Lieverse, Kitty and Tirado, Ignacio, Stability, Flexibility and Proportionality: Towards a Two-Tiered European Banking Law? (February 21, 2018). European Banking Institute Working Paper Series 2018 - no. 20. Available at SSRN: https://ssrn.com/abstract=3128304 or http://dx.doi.org/10.2139/ssrn.3128304

Bart Joosen (Contact Author)

VU University Amsterdam ( email )

De Boelelaan 1105
1081 HV Amsterdam
Netherlands

European Banking Institute ( email )

Frankfurt
Germany

HOME PAGE: http://www.ebi-edu.eu

Marco Lamandini

University of Bologna - Department of Business Law ( email )

via San Giacomo, 3
Bologna, Bologna
Italy

HOME PAGE: http://www.diritto.unibo.it

Matthias Lehmann

University of Bonn ( email )

Institute of Private International Law
Adenauerallee 24-42
Bonn, 53225
Germany
+49228737100 (Phone)
+49228739180 (Fax)

HOME PAGE: http://www.jura.uni-bonn.de/index.php?id=7208

Kitty Lieverse

Loyens & Loeff N.V. ( email )

P.O.Box 71170
Amsterdam, 1008 BD
Netherlands
+31 20 578 57 55 (Phone)
+31 20 578 58 00 (Fax)

HOME PAGE: http://www.loyensloeff.com

Radboud Universiteit Nijmegen ( email )

Postbus 9108
Nijmegen, 6500 HK
Netherlands

HOME PAGE: http://www.ru.nl/

EBI | European Banking Institute ( email )

Frankfurt
Germany

HOME PAGE: http://www.ebi-edu.eu

Ignacio Tirado

Universidad Autónoma de Madrid ( email )

Campus de Cantoblanco
Madrid, Madrid 28049
Spain

European Banking Institute ( email )

Frankfurt
Germany

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