EBA Responds to European Commission Consultation on EU Banking Sector Competitiveness

The EBA responds to the European Commission’s consultation on EU banking sector competitiveness

• Press Release
• 17 April 2026

The European Banking Authority (EBA) has today published its response to the European Commission’s consultation on strengthening the competitiveness of the EU banking sector . In its response, the EBA underlines the importance of completing the Single Market for financial services, as a key driver of banking competitiveness. Drawing on its robust analytical work, the EBA provides evidence-based insights on banking competitiveness, the Single Market and the Banking Union, as well as on the complexity and effectiveness of the regulatory framework. These insights aim to support the European Commission’s report on the EU banking competitiveness.

The EBA highlights the resilience of EU banks, strengthened by the post financial crisis reforms, while also pointing to the complex challenges facing the sector, including geopolitical risks, exposures to non-bank financial institutions, and digital transformation.

The response also builds on the EBA’s October 2025 Report on the efficiency of the regulatory and supervisory framework (the Task Force on Efficiency – TFE - Report), which put forward 21 recommendations to simplify the banking rulebook. In line with these findings, the EBA emphasises that competitiveness can be enhanced through targeted simplification, while respecting the following principles:

• maintaining resilience and credibility by staying committed to Basel III standards;
• enabling banks to fully benefit from the Single Market;
• preserving and deepening the Single Market and the Banking Union; and
• ensuring an EU level playing field, with appropriate proportionality adjustments that avoid fragmentation of the rulebook. The EBA will continue working closely with the European Commission to support a competitive, resilient and stable banking sector.

Background

Over the past decade, the EU built up its regulatory and supervisory framework, increasing complexity and administrative burdens for institutions and authorities in some areas. In response, the EBA has launched a structured programme to promote simplification, proportionality and efficiency, while safeguarding financial stability and resilience.

A key milestone was the publication, in October 2025, of the Report on the Efficiency of the Regulatory and Supervisory Framework, which sets out targeted recommendations to streamline regulatory products, reduce reporting burden, strengthen the EBA’s contribution to the EU prudential framework and improve internal working arrangements.

Summary of the EBA's response to the European Commission's consultation on banking competitiveness

The European Banking Authority (EBA) contributes to the targeted consultation by the European Commission (EC) on the competitiveness of the banking sector and how EU banks can best make the EU a more attractive and competitive place for investors and citizens alike. Since its inception, the EBA has been fully mobilised to enhance the stability and effectiveness of the EU financial system through consistent, transparent, and fair regulation and supervision.

The EBA provides response to 43 of the 95 questions asked in the consultation.

EBA’s responses draw on the Authority’s ongoing work as well as on the report on the efficiency of the regulatory and supervisory framework (“TFE report”) it has published on 1 October 2025 [1].

The response acknowledges the resilience of the EU banking sector following an institutional and regulatory build-up since the great financial crisis. As evidenced by the EBA EU-wide 2025 stress test, EU banks have demonstrated their ability to withstand extremely adverse shocks while remaining able to pursue their lending activities. This key as the EU economy largely relies on banks funding.

The EU banking landscape is diversified in size, geographical footprints and business models. EBA analysis confirms that this diversity contributes to stable funding structures, sound capitalisation and resilient profitability across bank types. The EBA notes the presence of foreign financial institutions in the EU, which hold significant market shares in some segments (e.g. derivatives).

The macroeconomic context is evolving fast and EU banks are faced with a volatile and highly uncertain environment. Geopolitical tensions, trade disruptions and market volatility could trigger abrupt repricing of assets, thereby impacting asset quality and profitability. Also ranking high are sectoral vulnerabilities such as exposures to non-bank financial institutions (NBFIs) and transitional challenges linked to digital, sustainability and demographic evolutions.

The digital transition is already deeply transforming the banking sector. New entrants increase competition and encourages incumbent banks to integrate innovative technologies to front and back-office processes. Most EU banks are organically or inorganically incorporating artificial intelligence, cloud computing and Big Data analytics, amongst others, which also comes with new risks.

The EBA’s TFE report has built its recommendations on simplification on four guiding principles: (1) keep up resilience and credibility by commitment to Basel III standards, (2) better reap of the potential of the Single Market, (3) deepen the Single Market and finalise the Banking Union, and (4) maintain an EU level playing field, with appropriate proportionality adjustments and no fragmentation.

Banking rules developed in the EU over the years have increased level playing field and stability, thus fostering the Single Market. They are also complex, as manifested by the various layers of detailed Level 1 (especially if set by directives instead of regulations) Level 2 and Level 3 rules, and supervisory guidance. The EBA acknowledges that setting out provisions through directly applicable regulations fosters convergences within the EU banking sector. Depending on the issues, the rulebook need to find the right trade-offs between warranted supervisory flexibility and consistency through harmonisation.

After years of harmonisation, it is now possible to shift towards more focus on supervisory convergence work. This encompasses the check on the consistent and coherent application of rules, as well as on the review on the existing single rulebook to review the stock of legislation. The EBA is looking into the articulation of requirements across levels 1, 2, 3 texts.

As mentioned in the responses to the EC consultation, the EBA is developing analysis and proposals in the main following areas:

Production of regulatory mandates

| Review of the single rulebook by building blocks | The EBA is reviewing all the regulatory products it has developed (Level 2 and Level 3) since its establishment, starting with credit risk, governance and remuneration, ESG, supervisory processes including stress tests and resolution.

• On credit risk, the EBA is consulting until 10 May 2026 on a Discussion Paper to enhance efficiency and simplicity by consolidating existing regulatory products and key definitions. which will input into the EC analysis.
• On governance and remuneration, the EBA is consulting until 26 May 2026 (with ESMA) on the suitability assessment of banks and investment firms’ officials. Work on reducing the complexity of the governance and remuneration requirements is under way (guidelines on third-party risk management, revised guidelines on internal governance, RTS on the minimum list of information for competent authorities).
• On ESG, simplifications on riskiness of exposures to environmental and social risks are expected by end-2026.
• On the review of supervisory processes including stress testing, the EBA streamlined the supervisory approval process for banks using Internal Ratings Based (IRB) models by reducing the overall number of changes subject to prior approval. In addition, it will release new details on its review of SREP guidelines end Q2 2026. Work on the simplification of the EU-wide stress test is ongoing. | Reporting

| Fostering integrated reporting | The EBA is committed to the development and implementation of an integrated, cross-sectoral reporting system. The Joint Bank Reporting Committee (JBRC) set up jointly by the EBA and ECB in 2024 brings together key stakeholders to build an integrated reporting system covering prudential, resolution and statistical reporting. It works on semantic integration and the development of common definitions and standards for the data that banks are required to report for statistical, supervisory and resolution purposes. |
| Review and reduce existing reporting requirements | The EBA has established a harmonised EU‑wide reporting framework delivering significant efficiency gains for financial institutions and authorities compared with 27 separate national regimes. This has strengthened the foundations for consistent risk analysis and supervision across the Union. The EBA aims to reducing reporting costs by 25% overall.

The EBA is consulting until 10 July 2026 on proposals to better align reporting requirements with supervisory needs and reduce the number of data points across the EU harmonised reporting by 50%, strengthening proportionality, in particular for small and non-complex institutions (SNCIs). |
| Implement a national public EU repository of competent authorities’ data requests | The EBA is establishing an EU-wide public repository of information requests by European and national competent (and resolution) authorities from all institutions in the EBA remit. This would provide public accountability, may facilitate future streamlining and data sharing amongst authorities, and help banks manage the overall reporting burden by not requesting similar information that is included in the EU reporting. |
| EU-national coordination of reporting initiatives | In addition to collecting data through regular reporting, European and national competent authorities and resolution authorities can request additional data on ad hoc basis. The EBA is working on proposals to facilitate convergence of practices for designing and making such data requests. These common practices will contribute to better coordination between the CAs and RAs and will also reduce reporting burden for banks. |
| Change management actions | First measures to increase predictability and stability of reporting change were introduced in the wake of the 2021 EBA Cost of Compliance report. The EBA aims to strengthen ex ante impact assessments, increase predictability of the reporting changes through deeper engagement with the stakeholders, and reduce the frequency of changes. |
Holistic picture

| Reflect on the streamlining of capital/buffer/MDA requirements and the multitude of tiers of own funds and TLAC/MREL | Following the publication of the EBA report on stacking orders and capital buffers – reflections on management buffer practices in the EU in 2024, the EBA is reflecting on the articulation of the various stacks of capital requirements and buffers (TFE Recommendation 9) and the interplay of capital/buffer/MDA requirements and the multitude of tiers of own funds and TLAC/MREL. More analysis to follow in Q2 and Q3 2026. |
| Introduce a more systematic application of simpler rules for the SNCI category while maintaining a single bank regime and explore the expansion of the SNCI category | The EBA is committed to ensure proportionality of the rules and further reducing compliance costs, in particular for smaller institutions, without loosening the prudential standards (TFE recommendation 10 and Article 519f CRR) and will provide a report on the suitability of the prudential framework for SNCIs, analysing whether and to which extent more proportionality may be introduced in the framework. |
| Reflect on the existing balance of the home-host responsibilities and the use of waivers in the Single Market in the context of the Banking Union | The TFE report raised the issue of the right distribution of capital and liquidity within banking groups taking into account both the benefits of centralised risk management and those of local stability. Special attention is also given to the interaction between prudential and resolution frameworks. |
| Set up supervisory platforms bringing authorities from various horizons together | The EBA is exploring the potential and limits of implementing holistic supervisory “college” platforms bringing together all the authorities involved in the supervision of a given bank across regulated areas - especially macroprudential, microprudential, resolution (TFE Recommendation 14), leveraging on its broad constituency, which can help bring authorities from various horizons together to coordinate the setting of measures towards supervised entities (including setting of requirements) and avoid duplication, overlaps, inconsistencies or missed angles. |
| Periodically report to co-legislators about the adequacy and impact of the EU framework | As the EBA is committed to review the stock and the flows of the incoming mandates, the EBA could also provide on a regular basis an impact assessment of the regulatory framework applicable to banks in the EU (TFE recommendation 18). |

[1] EBA Report on the efficiency of the regulatory and supervisory framework, EBA/REP/2025/26, 1 October 2025 , available here.

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EBA response to European Commission's consultation banking competitiveness

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