The Institute of International Finance (IIF) welcomed the European Commission’s report on strengthening the competitiveness of the European banking sector and advancing a more integrated Single Market for banking and financial services.

Banks in Europe play a central role in financing households and businesses, supporting innovation, and mobilizing the investment needed to meet the EU’s economic and strategic priorities. The IIF welcomes the Commission’s recognition that ensuring Europe’s financial sector can perform that role effectively requires a regulatory and supervisory framework that preserves resilience while also being proportionate, risk-sensitive, predictable, and supportive of sustainable economic growth.

A competitive and well-functioning banking sector will be essential to financing Europe’s twin digital and green transitions, strengthening economic security, supporting defense and resilience investments, and advancing the objectives of the Savings and Investment Union.

The IIF also welcomes the Commission’s focus on modernizing the regulatory framework and reducing unnecessary complexity and duplication. Such modernization should not be framed as deregulation, but as an opportunity to ensure that rules and supervisory practices are coherent, appropriately calibrated, focused on material risks, and applied consistently across the Union. The upcoming policy proposals based on the report recommendations should be bold and ambitious and take a holistic view of the cumulative impact of regulatory, supervisory, reporting, resolution, conduct, and sustainability requirements on banks’ capacity to support growth and investment.

Europe has made significant progress in strengthening the resilience of its banking system. The opportunity now is to build on that strong foundation and ensure that the framework also enables Europe’s banks to finance the additional growth, productivity, investment, and innovation, to meet the Union’s broader strategic priorities,” said Tim Adams, President and CEO of the IIF. “We welcome the Commission’s focus on competitiveness, simplification, and the Single Market, as well as its commitment to continued stakeholder engagement. The industry has an important role to play in this process, and the IIF and its members look forward to providing practical, evidence-based input as the agenda moves forward.”

In its April 2026 response to the Commission’s consultation on the competitiveness of the EU banking sector, the IIF highlighted several priorities that should remain central as the work advances, including:

• Reducing fragmentation across the Single Market, including by addressing national gold-plating, unnecessary national discretions, and barriers to the efficient movement of capital and liquidity across cross-border banking groups.
• Making regulation and supervision more proportionate and predictable, with clearer supervisory expectations, greater focus on material risks and outcomes, and appropriate limits on duplicative requirements and greater transparency and predictability in supervisory expectations”.
• Modernizing the regulatory framework, including by improving clarity at the legislative level, reducing unnecessary complexity across Level 2 and Level 3 measures, and streamlining overlapping reporting and data requests.
• Improving coordination across regulatory, supervisory, macroprudential, and resolution authorities, with a more holistic view of cumulative requirements and greater use of data sharing and reuse.
• Advancing completion of the Banking Union and Single Market, including practical measures that support greater cross-border integration, risk-sharing, efficient allocation of resources, and market-led consolidation.
• Maintaining an international level playing field, including through consistent implementation of global standards and careful consideration of EU-specific measures that may impose unnecessary competitive disadvantages on European institutions.

The Commission’s work presents an important opportunity to translate longstanding ambitions of a more competitive and integrated European financial system into practical and durable policy outcomes. The IIF and its members look forward to engaging constructively with the Commission, the European Parliament, Member States, and EU regulatory and supervisory authorities as the process moves ahead.

Source: IIF