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By Gilles PIERRE, Head of Banking Regulation, ABBL
The concept of proportionality, embedded in all legal systems, aims at keeping the level of public intervention – in the form of rules, restrictions or sanctions – appropriate to what is actually needed to achieve the desired social objectives. In banking regulation, proportionality ensures that rules are applied in a manner that is appropriate, taking into account, in particular, the bank’s size and internal organization and the nature, scope and complexity of its activities. Simple and “easy to apply rules” are necessary for small and medium-sized banks, while more sophisticated banks may prefer to develop their own systems, tailor-made for the risks of their business and their groups. At the same time a...
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