The European Banking Federation (EBF) submitted its response to the European Commission consultation on the competitiveness of the EU banking sector, arguing that boosting competitiveness hinges on expanding banks’ lending capacity through greater capital efficiency rather than higher capital levels. It frames the EU as a predominantly bank-based system where stronger growth requires further lending, particularly to households, non-financial corporates and SMEs. The EBF says EU banks already meet fully-loaded Basel 3.1 capital requirements and that the main constraint is capital trapped by overlapping requirements across European and national authorities. It estimates that EU gold-plating, alongside supervisory and national discretions, adds up to 66% to the minimum requirements of the Basel standards, and highlights macroprudential policy as an area with an excessive number of tools. While noting proposals to merge buffers into non-releasable and releasable buckets, it argues reform would be ineffective unless buffer sizes are reduced, pointing to national designated authorities setting requirements of more than 10% of Common Equity Tier 1. The response also calls for EU decisions on capital allocation to loans to better reflect market and business-oriented criteria, and contends that “simplification without deregulation” is insufficient where rules are duplicated, cumbersome or inefficient. The submission urges prompt action to implement key recommendations associated with the Draghi and Letta reports before 2030 and indicates the EBF will continue engaging with policymakers on the reform agenda.
European Banking Federation 2026-04-19
European Banking Federation urges European Commission to reverse capital requirement compounding and cut gold-plating in competitiveness consultation response
The European Banking Federation has responded to the European Commission’s consultation on EU banking sector competitiveness, arguing that competitiveness should be enhanced by improving capital efficiency and freeing up “trapped” capital rather than increasing capital levels. It estimates that EU gold-plating, supervisory practices and national discretions add up to 66% to Basel minimum requirements, criticises the complexity and size of macroprudential buffers, and calls for capital allocation rules that better reflect market and business criteria. The EBF urges swift implementation of key Draghi and Letta report recommendations and signals continued engagement with policymakers on the reform agenda.