Proportionality in bank regulation and supervision - a joint global survey

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BCBS  | 
30 July 2021

The Basel Committee on Banking Supervision and the World Bank are publishing today the results of a global survey conducted with bank supervisors and regulators. The report summarises the responses from 90 authorities, with a broad distribution across geographical regions and income groups.

Proportionate implementation is practised widely, across geographic regions and income groups. Authorities view proportionality as promoting banking stability, reducing unnecessary regulatory burden and compliance costs, and making effective use of scarce supervisory resources. A majority of respondents are planning to implement or revise their proportionate approaches.

However, challenges remain during the design of proportionate approach and after proportionality is implemented. Examples of the former are: how to define the tiering criteria, how to maintain a level playing field and how to avoid opportunities for regulatory arbitrage. The latter challenges include: how to ensure financial positions are still comparable across banks and how to achieve net reduction in compliance costs and stress on supervisory resources and constraints.