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First, the ESBG is concerned that under its current framework, the proposals for a new Accord will lead to increased costs and bureaucracy due to the necessary overhaul of risk management systems and excessive reporting burdens.
Second, core aspects relating to the provision of SME finance still need to be developed. There is a core problem in that SMEs might not be considered under the retail portfolio but rather the corporate portfolio, hence subject to very different conditions. As such, the ‘retail’ definition needs to be developed further and should not discriminate against SMEs.
Third, the key aspect for the New Accord should be flexibility. Flexibility should include considerations such as the partial use of the Internal Rating Based (IRB) approach and also greater flexibility in the definition of ‘retail’ as well as in the maturity question. This would allow the credit institution to choose the model which is best suited to its business model.
See ESBG press release.
See also Bolkestein speech on FSAP timelines