Single market in banking workshop

Background and objectives

As announced in the savings and investments union Communication published on 19 March, the European Commission is preparing a report due in 2026 assessing the overall situation of the banking system in the single market, including the evaluation of the banking sector’s competitiveness. To inform this report, the Commission is organising two workshops in the third and fourth quarter of 2025 with the objective of gathering views and exchanging reflections among a wide and varied selection of stakeholders (by invitation only). The first workshop, held on 19 September, focused on the economics of the single market in banking. The second workshop will be on the complexity of the EU banking regulatory framework. The aim of these workshops is to have an open debate on the issues and challenges facing the single market in banking (problem definition, causes, implications) and to inform subsequent analytical internal work in the Commission.

Format

The workshops take place under Chatham House rules and are based on presentations by keynote speakers and remarks offered by discussants for each session as well as on debates with all invited participants (representing European institutions and agencies, Member States, academia, think tanks and the banking sector). The Commission moderates the exchanges. A summary of the discussions of the first workshop of 19 September can be found below, together with the presentations prepared by the speakers and discussants.

Summary of discussion

On 19 September 2025, the European Commission hosted a high-level workshop as part of its ‘single market in banking’ series, focused on the economics of banking in the single market.

The workshop gathered views from stakeholders on the state of play of the EU single market in banking focusing on the competitiveness of the EU banking sector, including vis-à-vis third-country competitors, its various business models, competition in various market segments, trends in cross-border activity and consolidation, and participation in the capital markets. The discussion explored how digitalisation is contributing to enhancing market integration and reflected on external factors influencing the EU banking sector.

Opening & context

The day opened with introductory remarks by Mr Klaus Wiedner (Director, European Commission), who underscored the importance of a resilient, integrated and competitive EU banking system for the broader single market. He recalled that the workshop takes place in the context of the Savings and Investments Union strategy. The introductory remarks focused on the crucial role of banks in financing firms, including small and medium sized enterprises, as well as households. Mr Wiedner pointed out that financial stability remains the focus of regulation, and that fostering competitiveness of the banking sector and EU economy at large needs to be reconciled with maintaining a resilient banking sector.

Session 1: Taking stock of the past decade in EU banking

• Speaker: Dirk Schoenmaker (Erasmus University, Bruegel)
• Discussant: Tobias Tröger (Goethe Institute Frankfurt, Sustainable Architecture for Finance in Europe)
• Moderator: Yann Germaine (European Commission)

This session offered a comprehensive overview of the EU banking landscape over the last ten years, highlighting trends in cross-border activity, business model evolution, and the limited consolidation (across and within Member States) despite the Banking Union. Speakers emphasized the existence of persisting barriers to the completion of the single market for banking. Regulatory fragmentation and national rules limiting the full potential of the single market were mentioned. The panel concurred that despite a common set of EU rules, there is no truly pan-European bank operating at full scale in the single market yet. They discussed with several participants the reasons for such fragmentation. Some argued that fragmentation in the banking market may be due to the regulatory framework, which despite being based on EU laws, still leaves significant options and discretions at national level. Others argued that national supervisory and enforcement practices might as well fragment the market and discourage market participants from providing services in all Member States. One of the conclusions was that to unlock the full potential in the single market the framework should become fully supernational, including for crisis management. Some attendees to the meeting disagreed that further centralisation of responsibilities of EU authorities would solve the issue.

Session 2: Competition & competitiveness in the single market

• Speaker: Elena Carletti (Bocconi University)
• Discussant: Olli Castren (European Banking Authority)
• Moderator: Stan Maes (European Commission)

The panel analysed the concepts of competition and competitiveness in the area of banking, focusing on how the concepts are related, and on the key metrics to measure them. It was also underlined why boosting competitiveness in the banking sector matters, due to its positive impact of competitiveness of the EU economy. Speakers discussed EU banks competitiveness versus international peers. Attention was given to the cross-border functioning of banks, third-country banks participation in the EU market, and the role of regulation in shaping competitive dynamics. The relationship between competition and stability was discussed in depth. Regulation was found to play a crucial role in ensuring stability, whereas competition was deemed desirable, if not “excessive”. Speakers advocated for enhancing the regulatory level playing field and encouraging innovation to foster a more vibrant competitive environment, noting the need for the EU to develop its open strategic autonomy and the Savings and Investments Union. In the debate that followed the panel discussion, some attendees recalled the importance for the EU to remain committed to multilateralism, namely by implementing into Union law the internationally agreed standards for banking regulation (known as ‘Basel standards’). Other participants called on policymakers to remove the remaining barriers within the single market to let EU banks gain the scale that is necessary to compete on the international scene and be resilient to local shocks (economies of scale and scope).

Session 3: Digitalisation as a catalyst for integration

• Speaker: Tarik Roukny (Katholieke Universiteit Leuven)
• Discussant: Silvia Attanasio (Associazione Bancaria Italiana)
• Moderator: Anca Grigorut (European Commission)

This session focused on how digital technologies – such as Artificial Intelligence and distributed ledger technology – are reshaping the banking business. The panel focused on the dynamics that are affecting the way market participants value information and discussed data governance when data is regarded as a strategic asset. Panelists noted that the value chains of banks are in transformation, with individual services (deposit-taking, lending, payments, investment services) being modularised and unbundled and offered on platforms. At the same time, some traditional banks are experimenting with blockchain technology and stablecoins in an attempt to stay in the innovation race. Participants also discussed their respective roles in the buildup of private EU infrastructure for a digitalised banking ecosystem. One of the main conclusions was that digitalisation offers significant opportunities for the integration of the single market for banking, but it also comes with risks and vulnerabilities (e.g. fraud, cyber risks, money laundering). Speakers also warned of growing dependencies in critical infrastructure on non-financial third-party providers and risks of concentration and operational resilience that require better understanding and monitoring.

Session 4: External pressures on EU banking competitiveness

• Speaker: Karel Lannoo (Centre for European Policy Studies)
• Discussant: Veronique Ormezzano (Independent Advisor)
• Moderator: Almorò Rubin de Cervin (European Commission)

The final session addressed internal and external forces that create challenges for EU banks to compete on the global stage. Panelists identified fragmentation in the Union banking and capital market as one of the main roots of gap in EU banks’ potential. In addition, speakers mentioned the complexity of prudential requirements, set at EU and at a national level, as one of the key challenges for Union banks. Participants discussed institutional bottlenecks, including the incomplete Banking Union, as drivers for inefficiency. Speakers and some of the participants called for greater harmonisation and a comprehensive institutional framework to bolster EU banks’ global standing. The discussion touched upon the debates on reducing complexities in the capital stacks, as part of the broader debate on simplification of banking regulation and on how to advance integration of the EU banking sector. In terms of external forces, speakers mentioned geopolitical tensions, which call for greater financing of critical business sectors, as well as the need to foster the dual economic transition.

Closing remarks

Ugo Bassi (Director, European Commission) concluded the workshop by reaffirming the Commission’s commitment to a more integrated and competitive single market in banking. He called for continued dialogue among stakeholders to resolve persistent fragmentation and adapt the EU regulatory architecture to evolving market and geopolitical realities.

Mr Bassi also announced that another workshop in a similar format is planned to take place in Q4 2025. That second workshop will be focused on addressing the complexity in the microprudential, macroprudential and resolution frameworks, including as far as their interactions are concerned.

Key takeaways

• The single market for banking has improved significantly in the past years, but market fragmentation remains high.
• A strong institutional and regulatory framework remains essential to enhance the global competitiveness of EU banks and of the EU economy.
• Digitalisation offers a promising path forward for improved competitiveness, but it requires coordinated oversight and risk management.
• A holistic policy approach is needed to address both internal and external challenges to EU banks’ competitiveness.