France and Germany are jointly urging the European Commission to introduce a comprehensive “financial services simplification package.” The initiative aims to streamline EU regulations, making them easier for firms to navigate and less burdensome overall. According to a letter seen by Reuters, the countries are advocating for a review of the entire framework of European financial market regulation to ensure coherence, effective implementation, and ultimately bolster the region’s economic competitiveness. This comes as Europe grapples with relatively weak economic growth and challenges in integrating its banking sectors.
German Finance Minister Lars Klingbeil and his French counterpart Roland Lescure highlighted several key areas for potential simplification. These include streamlining reporting requirements, relying on established market practices, repealing unused delegated powers, and simplifying rules for reporting cyber incidents. The ministers emphasised that selective tweaks to future legislation are insufficient; the EU must also simplify existing rules to strengthen the single market for financial services. The aim is to improve the global competitiveness of European institutions.
The ministers argue that regulations must be regularly assessed and revised when they fail to deliver the intended value, citing the example of regulations for small banks. They pointed out that banking regulations often require small banks to disclose data that may not even be utilised, adding unnecessary burden. The push for simplification also aligns with global trends, as the U.S. and the UK are also easing some of their financial regulations.
Both France and Germany are preparing further input on banking regulation, which they plan to share with the commission in the future. The ultimate goal is to ensure sufficient funds are available for investments in the real economy and the modernization of Europe. The ministers firmly believe that European banking regulation must become better and simpler to achieve this aim.
