Unlocking the Banking Union and Simplification Strategies

This article serves as a technical report discussing the simplification of supervision and regulation within the European banking system. It outlines the current robustness of the European banking sector, which has been shaped by the Single Supervisory Mechanism (SSM) and the Single Resolution Mechanism (SRM) over the past decade. The report emphasizes the need for simplification to enhance competitiveness and support economic growth, while adhering to international standards and avoiding deregulation. It details the challenges faced by the banking sector, including fragmentation and regulatory complexities that hinder cross-border operations. The article presents proposals from the European Banking Authority (EBA) and the European Central Bank (ECB) aimed at reducing regulatory burdens and improving the efficiency of supervision. It concludes with recommendations for achieving a more agile and risk-based supervisory framework, highlighting the importance of maintaining financial stability while pursuing simplification efforts.