This report, which was requested by the European Commission, analyses the appropriateness of the Risk Weights (RWs) for retail SME lending proposed in the CRD IV/CRR framework and assesses the possible effects of a reduction by 1/3rd in relation to the current regulation and the effect of an increase from €1m to €5m on the regulatory thresholds for SMEs. The report also includes proposals for alternative measures to be taken to create the right incentives to SME lending. This report was submitted to the European Commission in September 2012.