BPFI welcomes European Commission proposals on strengthening EU banking competitiveness
Policy roadmap supports a more competitive, integrated and resilient European banking sector but scope should be broadened further to reflect national market structures
Friday 17th July 2026 – Banking & Payments Federation Ireland (BPFI) welcomes today’s publication of the European Commission’s proposals on strengthening EU banking competitiveness, which sets out a policy roadmap to support a more competitive, integrated and resilient European banking sector. Key proposals include simplifying the capital framework, addressing national gold-plating and assessing current remuneration rules, while also signalling consideration of a potential competitiveness mandate for the European Banking Authority (EBA). However, while the roadmap is an important step forward, its success will depend on translating these proposals into practical measures and broadening the scope of reform to better reflect national market structures.
Commenting on the publication, Brian Hayes, Chief Executive, BPFI, said: “BPFI welcomes today’s proposals from the European Commission, which recognises that a more integrated and competitive banking sector is essential to Europe’s future growth and resilience. Banks are central to financing the real economy, from homes and businesses to infrastructure, innovation and the green and digital transitions. The next step is to translate this roadmap into practical measures that enable capital to flow more efficiently across the Single Market.”
Pointing to recommendations made by BPFI, Mr Hayes added: “The Commission’s report identifies many of the issues BPFI has consistently highlighted, including the growing complexity of the EU banking framework, uneven implementation across Member States, national gold-plating, and the cumulative impact of capital, supervisory and reporting requirements. These are not technical issues for banks alone. They affect the capacity of the financial system to support lending, investment and long-term growth. Importantly, this is not about weakening regulation or reducing resilience, but about ensuring Europe’s banking framework remains effective, proportionate and coherent.”
He continued: “While the proposals outlined today by the Commission are welcome, the scope should be broadened further to ensure EU reforms properly reflect national market structures and deliver genuine proportionality. This is particularly important for smaller Member States such as Ireland, where maintaining a level playing field within the EU, while ensuring European banks can compete internationally, is essential. Areas for further consideration should include how capital requirements for mortgage lending are calculated in markets with strict loan-to-value and loan-to-income limits, which have strengthened borrower resilience and credit quality, but are not fully reflected in current capital rules. The EU framework should also be modernised to better support SME lending, provide lower capital requirements for lending to social and affordable housing, and deliver greater harmonisation of remuneration rules across the EU.”
Looking ahead Mr Hayes stated: “A deeper and more integrated European capital market is essential to Europe’s long-term competitiveness, but structural reforms to build a genuine Savings and Investments Union will take time. In the meantime, Europe cannot afford to underuse the capacity of its banking sector. The priority now must be to deliver practical reforms that strengthen Europe’s banking sector, support the real economy and enable banks to play their full part in Europe’s competitiveness agenda.”
Mr Hayes concluded: “Today’s report is an important opportunity to move beyond a narrow debate on individual rules and towards a more strategic discussion about how Europe finances its future and delivers sustainable long-term growth. The Presidency of the Council of the EU provides a timely platform for Ireland to help shape and lead this agenda. As the Commission now seeks feedback ahead of more detailed measures expected in early 2027, BPFI will continue to engage constructively to help ensure the final reforms are simple, proportionate and growth-enabling.”
Key proposals from the European Commission include:
- Simplifying the capital framework and macroprudential buffers while preserving resilience.
- Removing national gold-plating and divergent implementation of EU rules.
- Embedding greater proportionality across regulation, supervision and reporting.
- Assessing the overall mandate of the EBA so that it takes the competitiveness of the EU banking sector into account.
- Supporting bank investment in innovation, digitalisation and cyber resilience by reviewing rules that can discourage investment in software and technology.
- Working towards further harmonising Member States insolvency laws.
- Reviewing the regulatory treatment of specialised lending for infrastructure and climate transition projects.
- Assessing the current remuneration rules and their impact on the competitiveness of the sector.
ENDS/
Notes to editors
- BPFI proposals on the EU banking framework: Unlocking Bank Capital to Support Europe’s Competitiveness – BPFI proposals for a simpler and more effective EU banking framework.
- The European Banking Federation also published a report prepared by Oliver Wyman: European bank competitiveness: Enabling banks to play a greater role financing European growth
Note: Banking & Payments Federation Ireland (BPFI) represents the banking, payments and fintech sector in Ireland. Together with its affiliates, the Federation of International Banks in Ireland, and the Fintech & Payments Association of Ireland, BPFI has over 120 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace.
Contact: Fiona Murphy, Head of Communications, fiona.murphy@bpfi.ie.
