Eleven of Europe’s largest banking groups have called on European Union institutions to halt further increases in capital requirements and accelerate regulatory simplification, arguing that the bloc’s banks are falling behind US rivals.
Signatories included the heads of Banco Santander, BNP Paribas, Barclays, UBS, Deutsche Bank and HSBC. The banks urged EU officials to pause new capital requirements.
They also asked for two legislative packages by early 2027, one simplifying rules for European lenders and one deepening market integration, splitting the Commission’s broader reform plan in two so that simplification can be prioritised. The banks said about €2.5 trillion of loss-absorbing capacity sits in regulatory buffers rather than supporting lending and investment.
EUROPE CONFRONTS THE SCALE PROBLEM
Cross-border banking within the EU is still hampered by national-level rules, ring-fencing requirements and differing deposit guarantee schemes, according to coverage of the letter.
The banks said the reforms would help finance small and medium-sized enterprises and investment in defence, energy and technology.
WHY IT MATTERS
The European Commission has said it aims to present its banking reforms by early 2027.