Recommendation 135

We received evidence to suggest that the use of regulatory thresholds is an important part of facilitating proportionate regulation, which exempts smaller firms from certain regulatory regimes. However, we received evidence to suggest that these thresholds had introduced constraints on smaller banks’ ability and willingness to grow, that is they represented ‘cliff edges’, and that more could be done to smooth the introduction of these thresholds. The evidence we received applied to the Bank of England’s use of thresholds, as well as ring-fencing which is set out in statute. Wholesale and retail sectors