The European Commission has set out a package of measures it says would make EU banking more integrated across borders and reduce regulatory complexity, as part of a wider effort to channel savings into investment and support economic growth.
The Commission said in a statement on Friday that it has adopted a “Communication on the competitiveness of the EU banking sector”, which outlines steps to strengthen the EU’s single market for banking.
It stated that the plans sit within its Savings and Investments Union strategy, which is intended to improve how the EU financial system directs savings into “productive investment”.
The Commission added that it identified three main problems limiting banks’ ability to support the EU economy: national fragmentation that makes it harder for banks to scale across borders; EU implementation of international rules known as Basel III — a global set of banking standards — that it said does not always reflect how EU banks operate; and complex, burdensome rules and reporting requirements.
Commission President Ursula von der Leyen declared: “Getting capital flowing is how we will get Europe growing,” adding that the plan would “recalibrate” the EU’s approach to risk while maintaining financial stability.
Barriers, safeguards and simpler rules
One of the main strands is removing obstacles to cross-border banking, including changes intended to let banking groups use capital and liquidity more efficiently across the EU, the Commission said.
It also emphasised it will seek to propose a “simpler and more effective” common deposit protection mechanism within the Banking Union, replacing a previous 2015 proposal for a European Deposit Insurance Scheme and building on existing central and national safety nets.
The Commission added it will more closely monitor how EU anti-money laundering and consumer protection rules are applied nationally, with the aim of making it easier for banks to provide services across borders.
On global standards, it said it will re-assess how the EU applies certain international rules that it said may be limiting banks’ lending capacity, and consider possible revisions to some prudential and corporate governance rules to better reflect differences in banks’ size and business models.
It also set out areas where it wants to simplify banking regulation, including streamlining elements of capital requirements, standardising parts of “resolution” requirements — the rules for managing failing banks — and adjusting criteria for “small and non-complex institutions.”
A package of legislative proposals to amend the EU banking regulatory framework will be put forward in the first quarter of 2027, the Commission announced.
