The European Commission is preparing a review of the EU banking rulebook. As calls grow to simplify financial regulation, a coalition of banks, civil society organisations and financial regulation experts warns that competitiveness should not become a route to weaker safeguards. Europe needs a diverse and resilient financial sector that can withstand downturns whilst continuing to finance the productive real economy.
The signatories call on President von der Leyen to ensure that any reform of EU banking regulation preserves the resilience and overall capital strength of Europe’s banking sector.
Simpler rules can help reduce unnecessary complexity, overlaps and national fragmentation. But simplification must not mean lower capital requirements, weaker buffers or a rollback of the safeguards introduced after the 2008 financial crisis. A strong capital base is what allows banks to absorb shocks and support long-term investment.
The Commission should focus on the real barriers to a more competitive European banking sector: fragmented financial markets, an incomplete Banking Union, inconsistent application of the Single Rulebook and unnecessary reporting complexity. They also call for support for diverse bank business models, including small and non-complex institutions, to support lending for local economies and SMEs.
