October 12, 2026

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October 12, 2026

Newsletter

The European Post

Policy • Diplomacy • strategic insight

LATEST
Social Security Coordination Reform Clears The Council After A DecadeCreative Europe 2027 Budget Sets €402 Million For Final YearNature Restoration Plans Reach Brussels As Review Clock StartsBerlin Sudan Aid Pledges Now Face A Delivery TestLebanon Tranche Ties EU Support For Lebanon To Reform GoalsLeaving The Parental Home Now Takes Until 26.3 Across The EUDigital Fairness Act Targets Dark Patterns Before Q4 DraftSatellite Operators Await The EU Space Act TriloguesCeuta Crisis Hangs Over Leaders Debate On Irregular Border CrossingsTen Warships Needed For Operation Aspides As Foreign Ministers MeetAmbassadors Weigh Digital Omnibus Cookie Rules On Sunday VoteHousing Exclusion Recommendation Heads To MinistersCapital Markets Supervision Package Wins A Council PositionPanama And Viet Nam Exit The EU Tax Blacklist In ReviewSixteen Capitals Run Late On The Consumer Credit Directive DeadlineBuilding Renovation Plans Leave Nine Capitals Facing EU Legal ActionEU-China Hybrid Car Deal Leaves Leaders To Judge Beijing’s OfferSwitzerland-EU Treaty Package Faces A Cantonal Majority Test In 2027Hybrid Threats Draw The EU Partnership Mission In ArmeniaFarm Quotas Hinge On The EU-Mercosur Interim Trade AgreementSocial Security Coordination Reform Clears The Council After A DecadeCreative Europe 2027 Budget Sets €402 Million For Final YearNature Restoration Plans Reach Brussels As Review Clock StartsBerlin Sudan Aid Pledges Now Face A Delivery TestLebanon Tranche Ties EU Support For Lebanon To Reform GoalsLeaving The Parental Home Now Takes Until 26.3 Across The EUDigital Fairness Act Targets Dark Patterns Before Q4 DraftSatellite Operators Await The EU Space Act TriloguesCeuta Crisis Hangs Over Leaders Debate On Irregular Border CrossingsTen Warships Needed For Operation Aspides As Foreign Ministers MeetAmbassadors Weigh Digital Omnibus Cookie Rules On Sunday VoteHousing Exclusion Recommendation Heads To MinistersCapital Markets Supervision Package Wins A Council PositionPanama And Viet Nam Exit The EU Tax Blacklist In ReviewSixteen Capitals Run Late On The Consumer Credit Directive DeadlineBuilding Renovation Plans Leave Nine Capitals Facing EU Legal ActionEU-China Hybrid Car Deal Leaves Leaders To Judge Beijing’s OfferSwitzerland-EU Treaty Package Faces A Cantonal Majority Test In 2027Hybrid Threats Draw The EU Partnership Mission In ArmeniaFarm Quotas Hinge On The EU-Mercosur Interim Trade Agreement

Banking Competitiveness Plan Targets Half Of Reporting Data Points

Baltasar Haraldsson
Legislative Monitor, Financial Services and Banking

Frankfurt: Banking competitiveness took centre stage on 9 October 2026, when finance ministers at the Economic and Financial Affairs Council discussed the Commission’s report of 17 July on the sector, following an informal exchange in Dublin on 18 September. The Commission plans to present a legislative package on banking competitiveness in the first quarter of 2027, and the ministers’ discussion shapes what that package will contain.

The Commission sees EU banks as resilient, well capitalised and profitable, but it says the sector stays fragmented along national lines and that parts of the rulebook are too complex. Cross-border corporate lending in the euro area makes up only about 16% of total corporate lending. Removing constraints on liquidity in cross-border subsidiaries could release about €230 billion of high-quality liquid assets.

The communication sets out three aims. The first is integration with safeguards, including more efficient allocation of capital and liquidity inside cross-border groups and enforcement action against member states that block bank mergers without justification. A new proposal would replace the 2015 deposit insurance scheme proposal, known as EDIS, and the Commission also wants more predictable group resolution strategies.

The second aim is to adapt international standards to a Union with more than 4,500 banks. The Commission stays committed to Basel standards, but it will clarify the output floor and transitional arrangements for unrated corporates and mortgages, and it will review specialised lending and software investments.

The third aim is simplification. The Commission wants to remove Pillar 2 capital requirements linked to the leverage ratio, align MREL more closely with the international TLAC standard and simplify the macroprudential toolbox. Reporting costs banks an estimated €11.2 billion a year, and the plan targets a 50% reduction in reporting data points.

The trade-offs in banking competitiveness are clear from the communication itself. Relief for cross-border groups on capital and liquidity must be matched by safeguards such as a simpler deposit insurance proposal and more predictable resolution plans. How the Commission balances those two sides will define how ambitious banking competitiveness reform turns out when it tables its text, and how far lenders in Frankfurt and other financial centres benefit.

Eurogroup President Kyriakos Pierrakakis added to the debate on 7 October in a speech to the European Banking Federation on completing the Banking Union. The next test for banking competitiveness is the detail of the first-quarter 2027 package, which will show how much capital relief cross-border groups really receive and which reporting duties disappear.

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