Speaking on The David Rubenstein Show: Peer to Peer Conversations, recorded July 13 in New York, Botin put it plainly: "Europe needs to change." Her message was that smarter rules would help companies compete, and she pressed for supervisors to have "a competitiveness mandate, much as they have in the US or the UK," so the region does not slip behind other jurisdictions.
Concern is growing that Europe's lenders are falling behind US rivals, a worry stoked by deregulatory moves in the Trump era. Against that backdrop, chiefs from 11 large European banks, with Botin among them, wrote last month to the European Commission's Ursula von der Leyen and to ECB President Christine Lagarde. Their request: hold off on any additional capital requirements while the bloc works through broader changes. In that appeal, the group also argued for European financial supervisors to be assigned a competitiveness objective.
In July, the European Union laid out a wide revamp aimed at tackling long standing inefficiencies, cross border barriers and home market favoritism that have weighed on its banks. The commission indicated that concrete proposals would arrive in the first quarter of next year, to be followed by negotiations with the European Parliament and the EU Council before any law is finalized. Notably, the package did not include a recommendation to give supervisors a competitiveness mandate.
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Rules shape bank profitability. A pause in new capital demands would be a friendlier near term backdrop for European lenders, while a future competitiveness mandate could tilt supervision toward growth. If the EU follows through on the reform timeline, the next few quarters could reset expectations for how European banks earn and return capital.
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