The European Commission’s Communication Competitiveness of the Banking Sector and the Single Market in Banking central message is that the EU banking sector is resilient and profitable but too fragmented and over-complex to compete, and that fixing this requires deeper cross-border integration backed by stronger Banking Union safeguards. To that end, the Commission signals a recalibration of prudential rules that better reflects EU specificities, plus a broad simplification agenda covering supervision, buffers, resolution and reporting. Notably, it frames competitiveness as a shared responsibility, explicitly calling on auditors and accountants to join a “cultural shift” toward a more substantive, risk-based approach.
We welcome the EC’s Communication and we support its aim to simplify the regulatory framework while preserving the resilience built since the financial crisis. Our Banks Working Party, representing auditors of many major European banks and in regular contact with regulators, supervisors and standard setters, brings practical experience of banking regulation, financial and sustainability reporting, and audit requirements.
We support a more proportionate, risk-based approach that reduces unnecessary complexity without weakening stability. Europe needs a framework that lets banks support growth, innovation and investment while remaining resilient; simplification should make regulation more effective, not less robust.
We also welcome the Commission’s call for a cultural shift toward risk-based regulation and supervision, and we stress that this must be anchored in high-quality financial reporting and independent audit. Investors rely on audited statements for economic decisions, and auditors provide assurance on financial and sustainability reporting while meeting demanding standards of quality management, ethics and regulatory compliance, subject to independent audit oversight, particularly for public-interest entities such as banks.
Achieving simplification, however, is a shared responsibility across the whole ecosystem: banks, banking and financial-market supervisors, audit regulators and the profession. It may require clarifying guidance and close dialogue to avoid differing interpretations and identify practical solutions that preserve trust. We look forward to contributing our technical expertise to the discussions ahead.
