German commercial banks urge faster deregulation by Brussels

Germany's commercial banks on Thursday called for EU regulators to move more quickly to keep up with international competition in the United States and United Kingdom.

The European Union must take specific measures considerably faster to make banks in the bloc more competitive, Heiner Herkenhoff, chief executive of the Association of German Banks (BdB), said in Frankfurt.

The European Commission aims to present its report on banking regulation and competitiveness on July 17. The BdB said this meant that the legislative process would start only in the spring of 2027.

"This would leave Europe having lost much of 2025 and 2026 - at a time when other major economies, including the US and the UK, are already adapting and streamlining their regulatory frameworks for banks," it said.

According to a study commissioned by the European Banking Federation, Europe's medium-term need for additional investment is around €1.4 trillion ($1.6 trillion) per year. This is €600 billion more than stated in the report on European competitiveness by former ECB President Mario Draghi.

"Europe needs strong banks to finance the vast investments required in digitalization, energy, defence and the industrial transformation. The competitiveness of today's banks must not become a casualty of political compromise," Herkenhoff said.

Regulatory authorities in the US and UK have eased regulations on banks introduced following the global financial crisis, with the US administration in the lead. Opponents have warned against going too far in loosening the reins.