Simplifying Europe’s financial services regulation and supervision: How to square competitiveness with financial stability
The accumulation of regulation and supervisory procedures since the GFC and European Sovereign Debt Crisis has substantially changed the working of financial institutions. Risks are certainly better managed but the financing of big and long-term risky projects (industrial, defense, climate, AI, …) has become constrained. At the same time, at the global level, a trend towards deregulation has set in. Europe is challenged to respond to these challenges and to find a new balance between ensuring continued stability in the banking system while enhancing banks’ ability to finance Europe’s key projects on internationally competitive terms.