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DRAFT REPORT (2026/2112(INI))

On the competitiveness of the banking sector in the European Union

ECON-PR-792092

Committee on Economic and Monetary Affairs · Rapporteur: Isabel Benjumea Benjumea

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A draft report by Parliament's Committee on Economic and Monetary Affairs on the competitiveness of the EU banking sector. It welcomes the Commission's July 2026 communication on banking competitiveness and calls for completing the Banking Union, simplifying capital rules and supervision, and enabling banks to use artificial intelligence and tokenisation.

Committee position. The rapporteur proposes that Parliament welcome the Commission communication and call for completing the Banking Union, adding a competitiveness objective to supervisory mandates, simplifying capital and supervisory rules, and enabling AI and tokenisation.

Key points

  1. Welcomes the Commission communication on banking competitiveness and urges the Commission and co-legislators to develop the legislative measures needed to complete the Banking Union.
  2. Calls for removing unjustified single-market barriers, simplifying regulation, fostering competition and market-led cross-border consolidation, and ensuring public support measures do not distort competition.
  3. Says the Banking Union's three pillars of supervision, resolution and deposit insurance should be developed with a clear timeline and measurable milestones.
  4. Welcomes the Commission's plan to use its enforcement toolkit against breaches of EU law, including in mergers and acquisitions, to reduce national interference in cross-border deals.
  5. Says consolidation should be market-driven under clear, predictable prudential and competition rules, and warns that unjustified government interventions may deter investment and fragment the single market.
  6. Wants the European Supervisory Authorities' mandates broadened to include competitiveness and innovation as a formal secondary objective, without prejudice to financial stability as the primary objective.
  7. Calls for simplifying the capital stack by reducing overlapping buffers and supervisory add-ons, and for proportionality to apply to all banks, including large and internationally active groups.
  8. Notes the EU applies the full Basel framework to virtually all banks and asks the upcoming review of Regulation (EU) No 575/2013 to explore an optional, simpler regime for small, non-systemic banks that do not operate across borders.
  9. Welcomes similar regulatory treatment of intragroup exposures in domestic and cross-border situations, and says Basel III aspects could unintentionally make credit less accessible to small and medium-size enterprises (SMEs).
  10. Calls the SME supporting factor effective and says it should be enhanced, with a strong case to raise the threshold for qualifying SME exposures to reflect the updated EU definition of small mid-cap companies.
  11. Calls for an omnibus legislative initiative to remove obsolete, burdensome or overlapping provisions, and for supervisory processes to be streamlined, including by tackling national gold-plating and duplicative data requests.
  12. Encourages banks to deploy artificial intelligence in creditworthiness assessment, fraud prevention and risk management, asks the Commission to clarify how the Artificial Intelligence Act interacts with financial services law, and backs tokenisation of money and assets.

Who is affected

  • EU banks, especially smaller and non-systemic ones, which would face simpler capital rules and lighter supervisory burdens.
  • Small and medium-size enterprises (SMEs), which rely heavily on bank financing and would benefit from an enhanced SME supporting factor.
  • The European Supervisory Authorities, whose mandates would gain a competitiveness and innovation objective.
  • National supervisory authorities, asked to harmonise the supervisory review and evaluation process and curb gold-plating.
  • The Commission, asked to propose an omnibus simplification initiative and clarify AI rules for financial services.

Figures and deadlines

  • Cross-border lending to companies accounts for barely 16% of total corporate lending within the euro area, according to the Commission.