The banking competitiveness report has hit its first real obstacle in the European Parliament. The Economic and Monetary Affairs Committee had planned to vote on the draft on Tuesday 10 November, but rapporteur Isabel Benjumea, a Spanish member of the European People’s Party, asked to move the vote to 1 December. The delay leaves Parliament about a month to settle its position before the Commission tables its banking package, which is expected in the first quarter of 2027.

Two open questions explain the postponement. The first is whether to reopen the mandates of the European Supervisory Authorities so that they carry an explicit competitiveness objective. The EPP and the banking industry back the idea, while the Social Democrats oppose it. Supporters argue that supervisors should weigh the cost of rules for European lenders. Opponents answer that a competitiveness duty could soften the prudential standards that protect depositors and taxpayers.

The second question is how to keep a level playing field with British and American banks while still applying the EU prudential framework. Brussels has already moved once on this front, because the Commission proposed to postpone the application of its trading book rules until January 2027 so that European banks would not compete under tighter conditions than their transatlantic rivals. Lawmakers now have to decide whether further relief belongs in the banking competitiveness report or in the legislation that follows it.

Inside the Commission, the form of the coming initiative is also unsettled. Valdis Dombrovskis, the commissioner responsible for simplification, says the format is still under internal consideration. Maria Luís Albuquerque, who holds the financial services portfolio, favours a single package that includes proposals to complete the banking union. Dombrovskis has reportedly preferred to separate simplification from banking union completion. The 2027 Commission work programme lists a banking competitiveness and simplification package as a tool to advance the Savings and Investments Union, so the banking competitiveness report carries stakes well beyond one committee vote.

Parliament’s text is a non-binding own-initiative report, yet it matters because it gives the Commission a political signal before drafting begins. The committee has worked on the banking competitiveness report for more than a year, and the head of the European Banking Authority addressed members in September. A broad majority behind the banking competitiveness report would strengthen the case for a fast package. A narrow or divided vote would invite the Commission and the Council to write the agenda without much input from MEPs.

The practical timetable is tight. If the committee approves the banking competitiveness report on 1 December, Parliament can still adopt its position during December and hand it to the Commission in time for the first quarter of 2027. Any further slippage would push the position into the new year and compress the time available to shape the proposal.

Banks and consumer groups will watch the supervisory mandate question most closely. A competitiveness objective for the EBA, ESMA and EIOPA would change how European supervisors justify tough decisions, and it would set a precedent for other sectors. The 1 December vote will show whether the banking competitiveness report can deliver a compromise that both sides of the chamber accept, or whether the dispute over supervisors will follow the file into the Commission’s 2027 package.