Brussels eases EU banking rules, steps up clash with Spain over merger

The European Commission is taking a dual approach to the European banking sector, simultaneously relaxing regulatory demands on banks across the continent while strengthening its stance against Spain. This strategy aims to foster the creation of larger, more competitive European financial institutions capable of challenging international rivals.

In one move, the Commission, under the purview of Maria Luís Albuquerque, has approved new rules that will ease existing requirements for the European banking sector. This aims to reduce burdens and potentially encourage consolidation and growth within the industry.

Concurrently, Brussels is escalating its infringement procedure against Spain. The action targets legislation enacted by Pedro Sánchez's government, which allegedly permitted government interference in the planned merger of two major Spanish banks, BBVA and Sabadell. The Commission views such interferences as obstacles to building banks with the necessary scale to compete effectively on the global stage against major players from the United States, the United Kingdom, and China.