The European Banking Federation (EBF) is calling on the European Union (EU) to streamline regulation of banks and to declare banks a “strategic sector.”
The group is promoting these reforms as a way to boost the competitiveness of the region’s banks, Reuters reported Tuesday (April 16).
EBF CEO Wim Mijs told reporters Tuesday during a briefing that Europe must take a hard look at its strategic sectors like defense, energy and manufacturing, which it has “outsourced” to the United States, Russia and China, respectively, according to the report.
Banks are making their request for “strategic” status in a formal way for the first time, though EBF President and Deutsche Bank CEO Christian Sewing urged that recognition last year, the report said.
It’s not clear what advantages that status would bring, because the EU does not publish a list of strategic sectors, per the report.
Banks also called for a streamlining of regulation, saying that while the reforms made after the global financial crisis made the industry more stable, the regulation is now excessive, overwhelming and increasingly overreaching, according to the report.
The EBF said regulations should be reviewed in terms of not only stability but also competitiveness and growth, per the report.
Critics of demands like this from the banking industry have said that regulation provides stability and must not be undermined, according to the report.
In an earlier development in this space, the head of France’s central bank said last May that European banks undergo stricter scrutiny from regulators than their American counterparts and have been more stable amid market upheavals.
“Our banks are robust, with substantial capital and liquidity buffers,” Francois Villeroy de Galhau said May 9, 2023, as reported at the time by Bloomberg News from its Future of Finance Forum.
“They are all subject to a) stringent Basel requirements and b) to single and strong supervision within the Banking Union since 2014, which on these two regards makes a big difference with many U.S. banks.”
In February, the European Council adopted a regulation making instant payments available in euros to consumers and businesses in the EU and European Economic Area nations.
