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Supervision: Private Banks Demand Faster Pace on Banking Rules from Brussels
🇩🇪 Germany /Economy & Trade

Supervision: Private Banks Demand Faster Pace on Banking Rules from Brussels

From Die Zeit · () German

Translated from German, summarized and contextualized by DistantNews.

At a glance

News Named sources New plan
  • German private banks are urging faster implementation of EU banking regulations to remain competitive globally.
  • They criticize the projected timeline, fearing it will leave European banks behind U.S. and U.K. counterparts who are already simplifying rules.
  • The banks highlight a significant investment gap in Europe and advocate for separating regulatory relief from the contentious issue of a European deposit insurance scheme.

Private banks in Germany are pressing Brussels for swifter action on banking regulations, warning that delays risk leaving Europe's financial sector trailing behind global competitors. Heiner Herkenhoff, CEO of the Association of German Banks, emphasized the need for the EU to implement concrete measures more rapidly to boost the competitiveness of European banks.

The EU must implement concrete measures significantly faster so that Europe's banks become more competitive.

— Heiner HerkenhoffThe CEO of the Association of German Banks stressing the urgency for EU regulatory action.

The European Commission is set to present its report on banking regulation and competitiveness on July 17. However, the Association of German Banks criticized the subsequent legislative process, which is not expected to begin until spring 2027. This timeline, they argue, would mean "2025 and 2026 would be largely lost" while regions like the U.S. and U.K. are actively adapting and simplifying their banking rules.

Citing a study commissioned by the European Banking Federation, the association stated that Europe requires an additional €1.4 trillion annually for mid-term investments, €600 billion more than previously estimated. "Europe needs strong banks to finance the enormous investments in digitalization, energy supply, defense, and industrial transformation," Herkenhoff said.

This would mean that 2025 and 2026 would be largely lost – at a time when other economic regions such as the USA or Great Britain are already adapting and specifically simplifying their rules for institutions.

— BankenverbandThe Association of German Banks criticizing the projected timeline for EU legislative processes.

While regulatory authorities in the U.S. and U.K., particularly under the Trump administration, have eased rules introduced after the 2008 financial crisis, critics caution against excessive deregulation. The German banking association also advised against linking the EU's goals of increased competitiveness and deeper capital markets with the European deposit insurance scheme. They argue that urgently needed regulatory relief should be pursued independently of this issue, which has been a point of contention among European nations for years, with German banks particularly wary of their funds being used to cover the failures of institutions in other member states.

Europe needs strong banks to finance the enormous investments in digitalization, energy supply, defense, and industrial transformation.

— Heiner HerkenhoffThe CEO of the Association of German Banks explaining the need for robust banks to fund key transformations.
DistantNews Editorial

Originally published by Die Zeit in German. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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