the implementing technical standard on supervisory reporting, for example. if it turns out that a disproportionately large amount of information is being collected, then we need to focus on ways to reduce this burden. another starting point would be to abolish disclosure requirements that have been rendered obsolete by the co - existence of european and german rules. i think unnecessary duplications in the collection of data should be eliminated by amending the german rules. viewed from this angle, i see germany's liquidity regulation as a candidate for the chopping block. and it will, in fact, be eliminated at the start of 2018, once the lcr has been fully implemented. yet another point i think is worth considering is to slim down smaller banks'reporting requirements to a minimal data package. then, only compliance with the minimum standards would be monitored. disclosure is another field where banks could be given a break. here, we should investigate just how often disclosure reports need to be published in order to supervise smaller regional institutions. in addition, we need to make sure that the disclosure reforms do not introduce any intra - year disclosure duties. my third suggestion for achieving greater proportionality is probably the most far - reaching of all. what i have in mind is the creation of separate regulatory frameworks for smaller institutions, on the one hand, and large multinational banks, on the other. even though the response to this proposal has been tepid so far, i nonetheless think it is worth considering as a fundamental approach – one that would systematically address the excess burden placed on smaller institutions'operational capacities. a two - tiered system could be put into practice through a graduated set of basel standards for institutions that are neither multinationals nor large in size. a broadly similar set - up has been up and running in the united states ever since the basel ii regime was implemented. any institution whose balance sheet exceeds a certain threshold there is subject to the basel rules. however, it would only be possible to do the same here in germany by creating rules at the european level. federal association of german people's banks and raiffeisen banks and european banking authority banking stakeholder group ( 2015 ) proportionality in banking regulation ( 52 f ). the legal basis for this and for the commission's work could be inserted in the crr ( and in the crd iv, too, if appropriate ). bis central bankers ’ speeches in this scenario, only banking multinationals would be subject to the fully loaded basel

still. basel iii and the capital requirements directive, or crr, are even more detailed, heavier on formulas, and more complex. why is there this trend towards ever more complex rules? five reasons stand out in particular. bis central bankers ’ speeches first : regulation has needed to keep pace – and still needs to keep pace – with ever more complex banking business. second : we are increasingly dealing with what is known as risk regulation. here, historical data and statistical procedures are used to calculate the probability of dangerous events occurring – the rules and regulations then stipulate how banks must prepare for such scenarios. third : global harmonisation brought about by the basel standards. these standards were created mainly for large international banks, but are being applied to all institutions in germany and the european union. fourth : complexity is also caused by european regulation, which imposes an additional set of rules that need to be followed. furthermore, the relationship between european and national rules is often unclear. and last, but not least, complicated rules are also an outcome of compromises. compromises are a necessary element of regulation – especially where a large number of countries with a wide variety of banking landscapes are involved. moreover, the changes proposed by banks and saving banks often haven ’ t exactly made the rules any simpler. this has made compliance with the rules an increasingly costly, time - consuming and unwieldy undertaking. such a complicated set of rules is all but bound to lead to a considerable increase in the costs of compliance. if such rules had been imposed on inspector schimanski and his ilk, tatort would have been a much less exciting show. i personally wouldn ’ t be thrilled to spend 90 minutes watching the inspector poring over implementing regulations. that ’ s only something for masochists, and gotz george, the actor who played inspector schimanski, certainly wasn ’ t one of those. 3. disadvantages : high compliance costs as i mentioned at the outset, the suspect ’ s motive to cause harm to banks and their customers via complicated rules isn ’ t very plausible. and the supposed sequence of events isn ’ t exactly water tight either. but one thing we do have to admit is that the complexity of banking regulation has made compliance very expensive for institutions – in two respects. first, the regulatory requirements generate work for the institution ’ s executives and employees. this includes one - off costs, such as the costs of procuring new software. but it ’ s also about