1 week ago
29
Eleven of Europe’s biggest banks just told Brussels, in polite but unmistakable terms, that the continent’s regulatory framework is holding them back. In a joint letter sent to high-ranking EU officials on September 10-11, top executives from Banco Santander, BNP Paribas, Barclays, UBS, Deutsche Bank, HSBC, and five other institutions called for immediate simplification of banking rules and deeper integration across the bloc’s fragmented financial system.
The pitch boils down to this: European banks have built up €2.5 trillion in loss-absorbing capacity. They’d like regulators to stop piling on new capital requirements so that money can actually flow into lending and investment instead of sitting in regulatory buffers.
What the banks are asking for
The letter, signed by figures including Ana Botín of Banco Santander and Jean Lemierre of BNP Paribas, makes two concrete legislative asks. First, a simplification package that would strip out redundant or overly burdensome rules governing European lenders. Second, a market integration package designed to make cross-border financing within the EU smoother and less costly. Both packages, the banks argue, should be introduced by early 2027.
The letter specifically highlighted the need to support small and medium-sized enterprises, along with strategic investments in defense, energy, and technology.
Europe’s annual investment gap tells the story in a single number. The continent faces an estimated annual investment need of €1.2 to €1.4 trillion.
Why now, and why this tone
The timing of this letter is anything but random. European bank executives have been pressing for regulatory relief since at least February 2026, when industry pressure began building around concerns that the EU was falling behind the US and China in financial competitiveness. Both Washington and London have been moving toward lighter-touch regulatory approaches, and European lenders are watching their American and British counterparts operate with greater flexibility.
The EU hasn’t been deaf to these concerns. In July 2026, the European Commission issued a communication on banking competitiveness, with simplification measures tentatively aimed at 2027. But the pace of reform has frustrated bank leaders, who see the competitive gap widening with each quarter of inaction.
The letter also reflects a deeper structural anxiety. Europe’s Banking Union, conceived after the 2008 financial crisis to create a more integrated and resilient financial system, remains incomplete. Cross-border banking within the EU is still hampered by national-level regulations, ring-fencing requirements, and inconsistent deposit guarantee schemes. Banks operating across multiple EU member states often have to hold separate capital pools in each country rather than managing liquidity at the group level.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
English (US) ·