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REPORT (2023/2078(INI))

On Banking Union - annual report 2023

A-9-2023-0431

Committee on Economic and Monetary Affairs · Rapporteur: Ivars Ijabs

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✦ In short · AI summary of this text, generated 26 Sept 2026

Written by a language model from the full text only; every figure comes from the text. The paragraph links open the paragraph a statement rests on — check the text itself before relying on it.

Parliament's resolution on the Banking Union annual report 2023 reviews progress and gaps in the Banking Union, which covers the Single Supervisory Mechanism, the Single Resolution Mechanism and a single rule book. It calls for completion of the Banking Union, including a European deposit insurance scheme (EDIS), and for the Commission to keep the Banking Union and Capital Markets Union as priorities. It asks for a rapid adoption of the crisis management and deposit insurance (CMDI) review, full ratification of the backstop to the Single Resolution Fund, and measures to break the bank-sovereign link. It addresses supervision, Basel III implementation, crypto-asset rules, non-bank financial intermediaries, climate and nature risks, gender balance, and the banking sector's role in sanctions against Russia.

Committee position. The Committee on Economic and Monetary Affairs proposes a resolution calling for completion of the Banking Union, including EDIS, a rapid CMDI review, full ratification of the SRF backstop, and measures on supervision, Basel III, crypto-assets, climate risks and gender balance.

Key points

  1. Condemns Russian aggression against Ukraine and calls on banks to keep adapting strategies, address systemic risk and comply with EU financial sanctions.
  2. Calls on the Commission to create an EU-level database to coordinate banks on sanctions, close loopholes and assess implementation; notes Parliament's position on the anti-money laundering authority regulation.
  3. Notes limited direct banking exposures to Russia and Ukraine and calls on supervisors to help remaining EU banks exit the Russian market in an orderly way.
  4. Calls for completion of the Banking Union, whose third pillar EDIS is still pending, and asks the Commission to keep the Banking Union and Capital Markets Union as key priorities.
  5. Notes rising EU bank profitability but warns it must be sustainable, encourages using profits to build buffers and finance the economy, and notes banks tightened credit standards.
  6. Calls on the Commission to assess impediments to cross-border mergers and ring-fencing, and regrets barriers to cross-border retail banking and disparate interest rates for households and SMEs.
  7. Highlights the banking sector's role in the digital and green transition, regrets lack of gender balance in financial institutions and ECB and SRB bodies, and urges the ECB to heed Parliament on appointments.
  8. Notes high sovereign exposures, calls for international consistency in prudential treatment of sovereign debt, and says an EU safe asset could mitigate sovereign-bank feedback loops.
  9. Notes capital and liquidity ratios, falling NPL ratio, and calls on supervisors to monitor stage 2 loans and prepare for asset quality deterioration; welcomes Basel III agreement and awaits a crypto-asset prudential proposal by 30 June 2025.
  10. Stresses the need to enhance resilience of non-bank financial intermediaries and a level playing field with banks, and welcomes climate and nature risk work in ECB supervision.
  11. Welcomes SRB progress on resolvability, calls for transparency, protection of creditor hierarchy, and a rapid adoption of the CMDI review expanding resolution scope and insulating taxpayers.
  12. Calls for full ratification of the ESM Treaty Amending Agreement to establish the Single Resolution Fund backstop, and supports resuming negotiations on an ambitious EDIS with risk-based contributions.

Who is affected

  • EU banks and the banking sector: must adapt strategies, comply with sanctions, prepare for asset quality deterioration and build buffers.
  • Households and SMEs: face disparate interest rates and barriers to cross-border retail banking; the resolution seeks fairer access to capital.
  • Supervisory authorities (ECB Banking Supervision, EBA, SRB): called to monitor risks, address diversity gaps and improve transparency.
  • The Commission: asked to assess cross-border merger impediments, create a sanctions database and propose crypto-asset prudential rules by 30 June 2025.
  • Member States: called to ratify the ESM Treaty Amending Agreement to establish the Single Resolution Fund backstop.

Figures and deadlines

  • NPL ratio decreased to 2.24 % in the first quarter of 2023.
  • Annualised return on equity rose to 10.04 % in the second quarter of 2023, from 7.59 % in the same period of 2022.
  • Common Equity Tier 1 ratio increased to 15.72 % in the second quarter of 2023, up from 14.96 % in the second quarter of 2022.
  • Liquidity coverage ratio fell to 158.00 % in the second quarter of 2023, down from 164.36 % in the second quarter of 2022.
  • 16 of 36 deposit guarantee schemes in the EU were below their required minimum funding level.
  • EU banks' return on equity is 5 points lower than that of US banks.
  • Commission legislative proposal on crypto-asset prudential treatment awaited by 30 June 2025.
  • All banks should be fully resolvable by the end of 2023.