Implementation dialogue on banking integration and competitiveness

Background

Given the importance of banks in the EU financial system and in the financing of the EU economy, Executive Vice-President Séjourné and Commissioner Albuquerque will hosted a second implementation dialogue to focus on “banking integration and competitiveness”. The implementation dialogue sought concrete feedback from participants on the regulatory barriers which hold back further integration of the EU banking market, including the implementation of the EU and national rules. It also explored how further integration could contribute to the simplification of the banking regulatory frameworks and how the banking sector can better support the EU economy. The conclusion of the dialogue would feed into a report assessing the overall situation of the banking system in the single market, including the evaluation of the banking sector’s competitiveness, announced in the savings and investments union (SIU) communication and planned for 2026.

Summary of conclusions

Disclaimer: The summary of this event does not represent the official position of the Commission or its services and does not bind the Commission in any way.

Over three hours, Executive Vice‑President Séjourné and Commissioner Albuquerque exchanged views with individual banks, financial technology companies (fintechs), European‑level associations representing the banking and financial sectors and civil society representatives to assess progress towards a genuine single market for banking, identify remaining obstacles, and discuss practical solutions to enhance competitiveness while preserving financial stability.

Participants broadly agreed that the EU banking sector is resilient and well capitalised, but that integration and competitiveness remain insufficient. A central concern was the cumulative complexity of the regulatory and supervisory framework, resulting from the interaction of Level 1, 2 and 3 legislation, extensive supervisory expectations and heterogeneous national practices. This complexity was seen as undermining predictability, increasing compliance costs and constraining banks’ capacity to lend, invest and operate cross‑border.

A recurring theme was fragmentation, notably through macroprudential measures, capital and liquidity ring‑fencing, and non‑aligned national discretions. Several banks highlighted that capital and liquidity remain effectively trapped within national borders, limiting efficient group‑wide allocation and discouraging cross‑border consolidation. Divergences in capital requirements for similar risks, combined with supervisory add‑ons and overlapping buffers, were cited as key obstacles to scale and integration.

Participants also underlined the declining of EU banks’ market share in certain activities, higher capital stacks due to EU‑specific requirements and deductions, and uncertainty around the international level playing field. While stability was recognised as essential, many stressed the need to reassess whether the current framework delivers the right balance between resilience and growth.

Non‑prudential fragmentation was highlighted as a major barrier to a functioning single market, especially in retail banking. Divergent consumer protection rules, mortgage and foreclosure regimes, investment product requirements and reporting obligations prevent reuse of systems across Member States and raise costs. Consumer representatives emphasised that extensive disclosure requirements often fail to improve outcomes, while one representative of a civil society organisation stressed the importance of safeguarding quality jobs, local access to banking services and fair labour standards.

Fintechs and neobanks representatives drew attention to implementation and enforcement gaps, including persistent IBAN discrimination, uneven performance of open‑banking application programme interfaces (APIs) and gold‑plating of operational requirements. They called for stronger enforcement of existing rules, an effective EU‑wide “28^th regime”, and further progress on open banking, open finance and fee transparency to support competition and innovation.

Across interventions, stakeholders converged on the need for holistic simplification of the regulatory and supervisory framework, greater harmonisation of macroprudential tools, reduced overlaps and clearer supervisory processes. Proposals included streamlining reporting, limiting discretion, improving transparency, addressing non‑prudential fragmentation and strengthening capital markets and securitisation to complement bank financing.

Executive Vice‑President Séjourné and Commissioner Albuquerque acknowledged the concerns raised, underlining that many are well known to the Commission. They stressed the need to preserve financial stability while improving competitiveness, address fragmentation in implementation and supervision, and advance greater Europeanisation. The Commission will reflect these inputs in its forthcoming work on banking competitiveness and continue engaging stakeholders in the process.

More information on implementation dialogues

Under the 2025 Communication on simpler and faster europe and the mission letters from President Von der Leyen, each Commissioner is required to host at least two implementation dialogues a year with stakeholders. Implementation dialogues are a new consultation tool focused on ensuring that policy objectives in a particular area are achieved in a way that minimises compliance burden.