EU Economy and Finance’s Post

🏦 A stronger, more competitive banking sector for Europe. The European Commission has adopted a 𝗖𝗼𝗺𝗺𝘂𝗻𝗶𝗰𝗮𝘁𝗶𝗼𝗻 𝗼𝗻 𝘁𝗵𝗲 𝗰𝗼𝗺𝗽𝗲𝘁𝗶𝘁𝗶𝘃𝗲𝗻𝗲𝘀𝘀 𝗼𝗳 𝘁𝗵𝗲 𝗯𝗮𝗻𝗸𝗶𝗻𝗴 𝘀𝗲𝗰𝘁𝗼𝗿, a key building block of the Savings and Investments Union. The goal: a banking sector strong enough and at a scale that enables it to finance Europe's strategic priorities, such as innovation, the clean transition, and defence, while delivering high-quality services to households and businesses. We have identified three challenges holding the sector back, and set out measures to address each: 1️⃣ 𝗙𝗿𝗮𝗴𝗺𝗲𝗻𝘁𝗮𝘁𝗶𝗼𝗻 𝗮𝗹𝗼𝗻𝗴 𝗻𝗮𝘁𝗶𝗼𝗻𝗮𝗹 𝗹𝗶𝗻𝗲𝘀 is preventing EU banks from scaling up, competing globally, and finding cross-border efficiencies. The response: reducing prudential and non-prudential barriers to cross-border activity, allowing banking groups to use capital and liquidity more efficiently across the EU, and a simpler, more effective common deposit protection mechanism in the Banking Union. 2️⃣ 𝗜𝗺𝗽𝗹𝗲𝗺𝗲𝗻𝘁𝗮𝘁𝗶𝗼𝗻 𝗼𝗳 𝗶𝗻𝘁𝗲𝗿𝗻𝗮𝘁𝗶𝗼𝗻𝗮𝗹 (𝗕𝗮𝘀𝗲𝗹 𝗜𝗜𝗜) 𝘀𝘁𝗮𝗻𝗱𝗮𝗿𝗱𝘀 doesn't always reflect EU specificities. The response: re-assessing how certain standards have been transposed where they may limit lending capacity, and considering revisions to prudential and corporate governance rules that reflect banks' size, business models, and activities. 3️⃣ Some EU 𝗯𝗮𝗻𝗸𝗶𝗻𝗴 𝗿𝘂𝗹𝗲𝘀 are too complex, including the interaction between microprudential, macroprudential and resolution rules. The response: simplifying the capital stack, further harmonising macroprudential buffers, streamlining resolution requirements and processes, and adapting rules for small and non-complex institutions. 𝗡𝗲𝘅𝘁 𝘀𝘁𝗲𝗽𝘀: building on stakeholder feedback, the Commission will propose a package to amend the banking regulatory framework in Q1 2027, in line with the One Europe, One Market roadmap. Stakeholders are welcome to submit further views in the months ahead. 👉 Read the Communication and share your views: https://lnkd.in/dadRWm-T #DGFISMA