Business model of banks and SSM

In recent years, Business Model analysis has become the conceptual framework used by regulators, analysts and investors in the attempt to identify a bank's main strategic behaviours and their implications in terms of competitiveness and possible future performance and stability. This interest follows the radical review and transformation of banks' strategies due to major changes to the competitive scenario in the financial industry, which affected their competitive positions and led to subsequent restructuring and strategic repositioning choices. From the point of view of banking supervision, the main regulatory reference for the analysis and assessment of banks' Business Models by the supervisory authorities is provided by the prudential regulation framework, mainly based on the Basel Accord on Capital Adequacy (Basel 3), with specific reference to Pillar II. In this case, the subject of proportionality becomes a relevant issue, since banks' Business Models have widely different degrees of complexity, which must be carefully considered for supervisory evaluation and SREP decisions