Market Analysis

European banks are urging the European Union to classify them as a strategically vital sector, emphasizing their importance for the region's competitiveness and sovereignty. This call, led by the European Banking Federation (EBF), comes ahead of the upcoming European elections, with 45 policy recommendations outlined in a recent report.

Christian Sewing, President of the EBF and CEO of Deutsche Bank, has previously highlighted banks' crucial role in European sovereignty. However, this is the first formal request at the European level for such recognition.

In a statement, Sewing emphasized the necessity of acknowledging banks' strategic significance in Europe's development. Despite this push from the financial sector, the EU does not currently define strategic sectors.

Wim Mijs, CEO of the EBF, highlighted how Europe has relied on other nations for defense, energy, and manufacturing over the past two decades, underscoring the need to reassess strategic sectors.

The report primarily focuses on regulatory issues, advocating for a more streamlined approach. While banking regulations were strengthened after the global financial crisis, banks now contend with what they perceive as excessive and burdensome legislation.

The EBF calls for a review of current regulations to assess their impact on stability, competitiveness, and growth. While bankers stress concerns about over-regulation, European officials, including ECB President Christine Lagarde, emphasize the importance of maintaining high standards.

Mijs clarified that they are not advocating for lowering standards but rather addressing the complexity of existing regulations, which they argue hinders efficiency.

Paraphrasing text from "Investing UK" all rights reserved by the original author.