Brussels will present “comprehensive package” to strengthen EU banking

O future legislative package will be based on the institution's report on the competitiveness of the banking sector and the single banking market, presented last july, which identified three major challenges for the european banking sector, including market fragmentation, the need to apply international standards more appropriately to the specificities of the european economy and the increasing complexity of the prudential framework.

“ These are the main issues identified by our extensive consultations and will form the basis of a comprehensive legislative package that the Commission will present in the first quarter of 2027,” said the Portuguese Commissioner responsible for Financial Services and the Savings and Investments Union.

Speaking to MEPs of the European Parliament’s Committee on Economic and Monetary Affairs in Brussels, Maria Luís Albuquerque pointed out that “cross-border banking in the EU remains limited.”.

“ We need to strengthen the single market and conclude the Banking Union, including by creating a third pillar for deposit insurance,” he said, alluding to a common European banking deposit protection system.

Furthermore, Brussels wants to adapt the application of international standards to the specificities of the EU economy, maintaining a level playing field, and simplifying the prudential framework, with more proportionate rules for smaller and more risky banks.

According to Maria Luís Albuquerque, “partial measures or measures that do not address structural issues” would not result, causing the EU not to move ahead with today, which includes “fragmented markets, insufficient funding and increasingly weak and anemic growth”.

“ EU banks are more resilient, they are better capitalised, they are more liquid and they are sustainedly more profitable than they were before 2008,” but “resilience alone is not sufficient” to ensure the competitiveness of European banks internally and internationally, said the person responsible.

The announcement of the banking package is part of the wider strategy of the Savings and Investments Union, which the European Commission intends to use to mobilise European savings and channel it into productive investment.

Negotiations are under way on the capital market integration and supervision package, supplementary pensions and securitisation, processes on which the person responsible considered that “progress must now live up to that ambition”.

The Community strategy is based on deepening the integration of capital markets and, in parallel, reducing obstacles to the creation of a genuine European banking market.

“ The barriers that prevent the creation of a genuine European banking system or genuinely European capital markets are well known, and many are deeply rooted”, concluded Maria Luís Albuquerque.

The European Commission wants to simplify the rules applied to EU banks and facilitate their expansion across borders to enhance the competitiveness of the sector without compromising financial stability achieved after the 2008 crisis.