All in all the draft GL represent a completely new supervisory approach, beyond supervisory convergence. While a strong emphasis is placed on benchmarking, there room for qualitative assessments and the application of proportionality seems very limited. The proposed methodology focuses the review process on score values and automatic measures, triggering capital requirements as the only solution. This seems far from the spirit of Pillar 2. There is a risk that the strong emphasis on benchmarks would force banks to act similarly, leading to increased procyclicality and systemic risk, which would go against the main intention of the supervisors.
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