Proportionality in the European Banking Law.Lessons from Silicon Valley Bank

Arrigoni Matteo () and Restelli Enrico Rino ()
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Arrigoni Matteo: Matteo Arrigoni is a Post-doc. researcher in Corporate Law at Università Cattolica del Sacro Cuore, Milan, Italy.
Restelli Enrico Rino: Enrico Rino Restelli in an Assistant Professor at Università degli Studi di Milano – Bicocca, Milan, Italy.

European Company and Financial Law Review, 2023, vol. 20, issue 5-6, 936-963

Abstract: 936European prudential regulation imposes significant compliance costs on banks, justifying extensive use of proportionality. However, the failure of Silicon Valley Bank raised numerous objections to this approach. According to many scholars and practitioners, the crisis of SBV originated from a substantial loosening of the regulatory standards and the corresponding supervisory enforcement. In this context, the article discusses the intricate relations between proportionality and financial stability, reaching an articulated conclusion. While concerning prudential capital requirements it seems reasonable to adopt a uniform discipline, as to supervision (e. g., SREP), a proportional approach seems more appropriate. At the same time, the failure of SVB advocates in favor of a partly different approach toward corporate governance.

Date: 2023
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DOI: 10.1515/ecfr-2023-0031

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