Why competitiveness matters for banks
The EU remains a predominantly bank-based financial system, where banks are the main source of external financing for households and non-financial corporations, especially SMEs, which still face limited access to capital markets. At the same time, there is a strong correlation between economic growth (GDP growth) in Europe and the expansion of lending. Therefore, more growth requires further lending - for this to occur, banks’ lending capacity must increase.
As clearly diagnosed by Mario Draghi and Enrico Letta, Europe’s competitiveness and future prosperity are at risk, unless it takes bold reforms to catch up and close the gap with its major competitors. As Europe faces additional annual investment needs of EUR 1.4 trillion, banks are at the center of ensuring that Europe remains competitive vis-à-vis its peers.
The EBF’s Call to Action
The EBF proposes action on two parallel fronts: structural reforms pursued with full ambition, and an agile process for delivering decisive short-term measures.
Following an extensive consultation process, the Commission has identified the right challenges and proposes a clear direction for the way forward. Translating this momentum into concrete actions will be imperative to help unlock investment and strengthen Europe’s competitiveness.
The upcoming regulatory review scheduled for Q1 of 2027 should address the 3 idiosyncratic problems of EU regulation and supervision: (i) gold-plating beyond international requirements, (ii) discretions by multiple authorities and (iii) fragmentation. It should also take into account European specificities and keep an eye on the implementation of international requirements in peer jurisdictions to preserve the level playing field.
This is an evolving topic. For more information, please refer to the key EBF position papers on this topic.