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With regard to the Standardised Approach, the experts were of the opinion that the granularity criteria should not be included in the European Directive. Otherwise smaller banks would face the problem that they cannot tap the full potential of the one million threshold, inhibiting the management of smaller banks’ portfolios. It may also prove detrimental to competition in the banking sector and lead to competitive disadvantages for small and medium-sized companies. The Basel Committee has already signaled that it will delete this criterion from the proposal in the near future.
With regard to the principle of subsidiarity, some experts stated that national supervisory authorities should be able to react flexibly to local particularities. It is doubtful if one central authority could fulfil this. Experts also favoured the extension of the partial use approach.
Other points mentioned were the effects on business creation and on the new accession countries. If new businesses are rated as high risk, loans will be more expensive and some businesses will not be created at all. With regard to the difficulties in collecting reliable data in accession countries, longer transition periods or a permanent right for partial use is needed.
Finally, it was claimed that all relevant information has to be available in time and well before the final consultation phase, which will take place between May and July 2003. The forthcoming Commission ‘Barcelona study’, which will be prepared between June and August 2003 will be issued too late. At least interim or provisional results of the report should be available in the consultation phase.
Position Papers of the experts can be downloaded from the EMAC website