In Germany there are roughly 1,700 credit institutions, several of which are “big players” and many are small institutions. Some have a balance sheet worth no more than a few hundred million euros. Some institutions have only a handful of employees. These small institutions are of course having a hard time with rules that are aimed at large and complex banks.
The main problem is the compliance workload – that is, the work involved in meeting the requirements and demonstrating that they’ve been met. This is to say that the rules could act as an additional handicap for small banks that are already under pressure from many sides. Take the rapid digitalisation of banking, for example, or the lowinterest-rate environment in Europe.