Brussels proposes easing banking rules to create European banking giants

The European Commission has proposed a plan to relax post-crisis banking regulations, aiming to boost the competitiveness of the EU banking sector and create larger banks capable of competing with US and international rivals. The plan, outlined in a report published on July 17, 2026, calls for simplifying capital requirements, reducing regulatory fragmentation, and facilitating cross-border mergers.

Key measures

• Relaxing capital and liquidity rules: The Commission suggests allowing banks to manage capital more centrally rather than maintaining separate buffers for each national subsidiary, potentially unlocking over €230 billion in liquid assets currently "trapped" within member states Source: Infobae.
• Easing the "zero-risk culture": The report states that regulators should focus on risks that materially affect financial stability and avoid a "culture of zero tolerance to risk" Source: El Confidencial.
• Reviving deposit insurance: The Commission will propose a new European Deposit Insurance Scheme (EDIS) to replace the stalled 2015 plan, though details remain vague Source: El Caribe.
• Adapting Basel rules: Brussels plans to adjust international Basel standards to avoid disadvantages, particularly the "output floor" that the US has decided not to apply Source: El Caribe, Infobae.

Reactions and concerns

While the banking industry welcomes the move, the European Central Bank (ECB) has expressed concern that simplification could lead to deregulation. The Commission insists the changes will not compromise safety but will eliminate duplicative requirements . The plan also targets national government interference in bank mergers, citing cases like UniCredit-Commerzbank and BBVA-Sabadell .