Recommendation 46

The ‘one size fits all’ approach arises in part from the way the UK authorities apply the Basel Framework to UK lenders. The Basel Framework—‘soft law’ standards issued by the Basel Committee on Banking Supervision—is aimed at internationally active banks. The UK’s approach can be contrasted with that of other jurisdictions such as the US whose capital framework applies on a graduated and proportionate basis depending on the size and complexity of the bank and the level of risk it poses to the system. The Committee welcomes the Small Domestic Deposit Takers (SDDT) regime as a helpful development but considers that the PRA could go further.