The European Commission published its Communication on the Competitiveness of the Banking Sector and the Single Market in Banking on Friday, drawing a cautious welcome from a senior European Parliament figure who called for faster and more ambitious action.
Markus Ferber, the European People’s Party group’s spokesman for economic and monetary affairs in the European Parliament, said the Commission had belatedly recognised that years of tightening regulation had damaged the sector’s competitive position. “Since the financial crisis, EU banking rules have only moved in one direction: tighter, with no regard for what that meant for competitiveness,” he said. “The shift in perspective is very welcome, but it comes very late.”
The Commission’s communication accompanied the withdrawal of a 2015 proposal on deposit insurance. Ferber said scrapping the old proposal was the correct decision, but warned that any replacement must not become a mechanism for mutualising deposit insurance liabilities across member states. That responsibility, he argued, should remain at national level.
On the question of proportionality for smaller lenders, Ferber was sceptical of the Commission’s approach. The communication proposes relief for small and non-complex banks, but Ferber argued that offering exemptions from a rulebook designed for large, internationally active institutions was insufficient. “Carve-outs from an overly complex regime remain a complex regime,” he said, calling instead for a genuinely separate regulatory framework for smaller, domestically focused banks.
Ferber pressed the Commission to bring forward legislative proposals before the first quarter of 2027, warning that delay carried a tangible economic cost. Every month European banks operated under rules that were not internationally competitive, he said, the bloc was losing market share, innovation and jobs.
The communication represents one of the Commission’s first concrete steps under its renewed focus on European competitiveness, a priority that has risen up the political agenda following the publication of Mario Draghi’s report on EU economic performance in 2024. Banking union, and in particular the long-stalled question of a common deposit insurance scheme, has remained one of the most politically contentious elements of that agenda, with Germany and other member states consistently resisting risk-sharing arrangements.