The European Central Bank (ECB) today published proposals to make banks, and the financial infrastructure in which they operate, better able to support the economy. These proposals are endorsed by all euro area central banks. The proposals form the ECB Governing Council’s response to the European Commission’s public consultation on the competitiveness of the EU banking sector.
The Governing Council’s proposals to simplify EU banking rules, published in December 2025, form the basis for this response and are integral to it. Those proposals and the ones released today should be read together.
Resilient banks are a prerequisite for the euro area’s long-term growth and competitiveness, especially in today’s uncertain environment. Competitiveness arises from harmonisation, integration and scale, not from deregulation. Competitiveness is now being held back by unnecessary complexity and cross-country fragmentation.
To overcome these challenges, the euro area must function more as a single jurisdiction in terms of financial regulation. To break the current deadlock in advancing the banking union, the Governing Council calls for synchronised progress on the key components, including concrete steps towards creating a European Deposit Insurance Scheme (EDIS), with a clear timetable for implementation. Capital and liquidity should be allowed to flow freely within a cross-border banking group in the euro area. The Governing Council also urges policymakers to foster deeper capital markets by progressing on the savings and investments union.
