The banking sector of the European Union is stable, well capitalized and profitable, but still too fragmented by national markets, burdened by complex regulations and insufficiently competitive at the global level, the European Commission has assessed.
European Commissioner for Financial Services Maria Luís Albuquerque presented a report on the competitiveness of the banking sector and the single market for banking services, stating that changes are needed so that banks can more strongly support investments, companies and households.
– Resilience is necessary, but by itself it is not enough to ensure competitiveness – said Albuquerque.
She pointed out that innovation, digitization, defense, energy security and the fight against climate change will require unprecedented levels of public and private investment, in the financing of which banks will play a key role.
According to the findings of the Commission, the banking sector still mainly operates within national borders, in the conditions of an incomplete single market and Banking Union.
Such fragmentation limits cross-border business and competition and prevents banks from reaching the size needed to compete equally with large global financial institutions, reports Fena.
Another problem relates to the application of international banking standards, which, according to the Commission, does not always sufficiently take into account the peculiarities of the European market.
The Commission also warns that other large economies are adapting international standards to the structure of their own banking sectors, which is why European banks may find themselves in a less favorable position.
