Europe's largest bankers are urging the European Union to ease banking regulation to boost the region's economic growth and avoid falling behind the US and China. In a letter sent to top European leaders, including Council President António Costa, European Commission President Ursula von der Leyen, European Parliament President Roberta Metsola and European Central Bank President Christine Lagarde, leaders of the 11 largest banks make two concrete requests. European Commissioner Maria Luís Albuquerque was also a recipient of the letter.
The first request is for an immediate and temporary moratorium on new capital requirement increases. The bankers point out that they already have 2.5 trillion euros in shock absorption capacity and consider it necessary to halt the wave of increasing demands until long-term reforms are in place, thus allowing capital generation to be used to finance Europe.
The second request relates to regulatory simplification, which the bankers argue should be a permanent banner and not a one-off objective. They call on supervisors, while continuing to oversee banks, to also consider factors such as competitiveness and growth, eliminating the zero-risk culture they consider to be deeply rooted. Among the signatories are Ana Botín from Santander and Nicola Namias from BPCE, as well as other CEOs from Swiss and British banks.
The bankers warn of a convergence of challenges facing Europe, including slow growth, geopolitical instability, wildfires, the lowest gas reserves in 14 years and the race to rebuild defense capacity and compete in critical technologies. They emphasize that savings exist and that banks can channel capital to productive investments, but warn that European reforms will only bear fruit if there is simultaneous action to remove barriers to private financing and investment.
