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The European Commission’s Banking Competitiveness Report comes at a critical moment for Europe’s investment agenda. Closing Europe’s investment gap requires a banking sector able to mobilise capital at the scale the Savings and Investments Union demands. This is dependent on a Single Market that is not only competitive and integrated but open for all banks operating in the EU to act as facilitators of investment. The report provides a window of opportunity to anchor that openness at the centre of the competitiveness agenda.

The report correctly identifies a set of barriers holding back Europe’s banking competitiveness, both in the regulatory framework and in the way that framework is supervised. Undue complexity and divergent national implementation continue to raise the cost of financing for European households and businesses, underlining the need for an ambitious banking omnibus that simplifies rules and delivers greater consistency across the EU. At the same time, the report is right to call for a more proportionate, risk-focused supervisory culture that examines whether burdensome practices are weakening the attractiveness of Europe’s banking ecosystem. A new banking competitiveness agenda should build on both priorities: simpler, more coherent rules and supervision that enables internationally active banks to support investment.

Internationally active banks, including third-country groups with a substantial European footprint, are central to delivering this agenda. These institutions channel global capital to European companies, underpin the liquidity and depth of EU capital markets and help international investors finance opportunities in Europe. Europe remains a strategic market for these firms, and their investment demonstrates confidence in European growth, European companies and European opportunity.

The test of genuine integration is whether a banking group can serve customers across the Single Market without rebuilding its operations in each Member State. The report recognises that divergent national application of EU rules discourages banks from offering pan-European services and consequently results in costly duplication and regulatory burden across jurisdictions. A more competitive framework would enable European and international institutions to thrive in Europe, offering clients choice and a full suite of payment and banking services across the Single Market.

Coherent implementation will determine whether these reforms enhance competitiveness. Where the framework adapts international standards to EU specificities, the test should be whether the result preserves a level playing field for banks competing in global markets and remains consistent with the standards those banks apply across jurisdictions.

The EU’s sustainable finance rules should help investors understand where their money is going and support Europe’s transition. The Commission’s proposal improves the current system, but some changes are still needed.

The new Transition category should focus on whether companies are cutting emissions, not on the sector they operate in. The 70% threshold should stay. The rules should also work with MiFID II and the EU Taxonomy.

Companies need 24 months to prepare. Firms that fall outside the new scope should stop reporting as soon as the rules enter into force.

Read the paper to learn how SFDR 2.0 can direct more capital towards Europe’s transition.

On Wednesday, 10 June, AmCham EU hosted Mark Uyeda, Commissioner, US Securities and Exchange Commission, for a discussion on transatlantic regulatory cooperation. The exchange focused on developments shaping global capital markets. Topics included the Savings and Investment Union, ESG and climate-related disclosures, digital finance and stablecoin regulation as well as EU-US capital markets competitiveness. Participants discussed how proportionate regulation can support innovation, lower costs for investors and contribute to economic growth on both sides of the Atlantic. The meeting also highlighted the importance of continued engagement between EU and US regulators as the financial landscape evolves.