Banking Competitiveness: Sound diagnosis of fragmentation, incomplete on prudential rules | Socialists and Democrats
The Socialists and Democrats welcome parts of the report on the competitiveness of European banks, presented today by the European Commission. The analysis of the challenges facing the European banking sector. . .
The Socialists and Democrats welcome parts of the report on the competitiveness of European banks, presented today by the European Commission. The analysis of the challenges facing the European banking sector is very accurate in its diagnosis of the detrimental effects of high fragmentation. However, its conclusions regarding the consequences of supposedly excessive European regulations of the sector are misguided. The excessive regulation that needs to be corrected is that which fragments the internal market. The S&D Group expects greater ambition from the European Commission when it presents its legislative proposal early next year regarding the removal of national barriers to consolidate a more integrated banking union. In this respect, the Commission's new proposal on the European Deposit Insurance Scheme (EDIS) cannot be a second-best solution that does nothing to stem the flow of financial contagion from bank balance sheets to public treasuries, which persists within the banking union. In anticipation of today’s report on the competitiveness of European banks, the S&D Group prepared its strategy for banking competitiveness,Size matters*, as a progressive contribution to shaping the European savings and investments union. The Group invites the Commission to take these solutions on board when proposing concrete legislation next year. Jonás Fernández, S&D spokesperson on economic and monetary affairs, said:"The S&D Group welcomes part of the Commission’s assessment of the real challenges affecting the competitiveness of European banks. These challenges stem from the costs generated by the fragmentation of our market, reflected in an incomplete Banking Union and the absence of a genuine European Capital Markets Union. "However, our group expects to see greater ambition in the legislative proposal. In particular, we believe that completing the Banking Union must be placed at the heart of the strategy to strengthen the sector’s competitiveness. The establishment of a fully-fledged European Deposit Insurance Scheme should therefore be a central pillar of the Commission’s approach. "The S&D Group remains firmly committed to completing the Banking Union and to advancing proposals that move decisively in that direction. We expect the Commission’s legislative proposal to translate today’s diagnosis into concrete measures. While today’s communication correctly identifies the challenges, it falls short in the ambition of the solutions it puts forward. The next step must be to complement this sound diagnosis with a level of political ambition commensurate with the European Union’s strategic objectives. "Note to editors:*A list of key actions to strengthen the competitiveness of Europe’s banks, proposed by the S&D Group:Completing the Banking Union through the establishment of a fully-fledged European Deposit Insurance Scheme (EDIS). Eliminating all national discretions and gold-plating. Greater convergence – or optional EU-wide regimes – for insolvency, taxation, and enforcement frameworks. Interoperable and scalable open-finance infrastructures. Supervisory practices that facilitate cross-border digital operating models. Reducing over-reliance on third-country – notably US – service providers for ratings, auditing, cybersecurity, AI, cloud computing, etc. Advancing the implementation of a European deposit guarantee framework and, where sufficient progress is made, moving towards the application of EU banking rules at consolidated level. Better integration of macroprudential decision-making at Banking Union level. Operational simplification under a “report once, use many times” principle, with harmonised data definitions and fewer parallel reporting lines. Adopting a holistic approach to the overall levels of capital and buffers required by different supervisors within and across the Banking Union.