Would it mean that these banks could hold less capital, less liquidity? In my opinion, proportionality means simpler rules for smaller banks. But it does not mean that the rules should be generally less stringent, or that banks can hold less capital or liquidity. Finally, a crucial issue is where to draw the line between small and large banks.
Depending on the objectives of proportionality, the line might be drawn according to the volume of total assets; or it could be linked to the size of specific business activities. It might also depend on banks’ business models or on whether or not banks use internal models.