The Bank Policy Institute[1] welcomes the European Commission’s Communication of 17 July 2026 on the Competitiveness of the Banking Sector and the Single Market in Banking, and the opportunity to offer follow-up comments as the Commission prepares its Q1 2027 legislative package. This letter follows on from our more fulsome response of 19 April 2026 to the targeted consultation which is linked below.[2]
1. The Communication
We welcome the Commission’s identification of fragmentation, excessive complexity and disproportionate implementation of international standards as key challenges. To achieve the competitiveness objectives set out in the Communication, the legislative package should address not only individual requirements, but also the cumulative impact of overlapping prudential, supervisory and resolution measures on banks’ ability to support investment and growth.
While the Commission correctly identifies concerns arising from overlapping prudential, macroprudential and resolution requirements and proposes several useful simplification measures, the proposals are at times focused on symptoms rather than the underlying causes of capital inefficiency. The Communication also gives insufficient attention to the international dimension of competitiveness, including the potential impact on the attractiveness of the Single Market to international banking groups and other market participants. These issues should also be addressed directly in the forthcoming package.
We encourage the Commission to recognise more clearly that competitiveness challenges arise not only from legislation itself, but also from supervisory practices, reporting requirements, extensive use of soft-law tools and insufficient home-host deference. Without addressing these drivers, simplification at Level 1 risks delivering limited practical benefits. We therefore support the Commission’s work on integrated reporting, greater automation and proportionality, clearer distinctions between binding requirements and supervisory expectations, and stronger accountability for Level 2 and 3 measures.
To read the full comment letter, please click here, or click on the download button below.
[1] The Bank Policy Institute is a nonpartisan public policy, research and advocacy group that represents universal banks, regional banks, and the major foreign banks doing business in the United States. The Institute produces academic research and analysis on regulatory and monetary policy topics, analyzes and comments on proposed regulations, and represents the financial services industry with respect to cybersecurity, fraud, and other information security issues.
[2] https://bpi.com/bpi-response-to-the-european-commissions-targeted-consultation-on-the-competitiveness-of-the-eu-banking-sector/
