Wall Street has been enjoying looser oversight under US President Donald Trump's deregulation push, and European lenders want a break too. Francois-Louis Michaud, who took over as chairman of the European Banking Authority in April, told Bloomberg he's "confident" workable relief can start landing in 2027. When pressed on whether any steps could be put in place next year and still matter, he answered, "We don't do non-meaningful things."
As the EU's executive arm, the European Commission intends to present a legislative bundle in the first quarter of 2027 aimed at easing concerns that Europe will trail the US as Washington rolls back rules. Banks have griped about the timeline, since EU laws typically take years to negotiate and then put into practice. Some planks require new legislation, including steps to simplify banks' capital stacks and a renewed, politically fraught push for an EU-wide deposit insurance scheme that supports the broader goal of letting capital and liquidity move freely across member states.
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Not everything needs fresh law, Michaud said, pointing to what can be done by using "the structures and mandates that exist." The Paris-based EBA is helping the Commission with a "big data request so we can do impact assessments collectively on different types of proposals." The EBA translates EU banking legislation into granular standards and oversees their consistent application across the bloc. Over the last three months, officials there and at other agencies have been working with the Commission to flesh out July proposals for broad reforms that would lower cross border frictions, trim reporting workloads, and relax some requirements.
Last October, the EBA published 21 ideas to simplify rules, has already implemented 10, and is consulting on further steps such as cutting harmonized reporting requirements by 50%. It is also building an integrated single rulebook to make all applicable requirements easier to find and use. "Simplifying the rule book can be seen as administrative," Michaud said. But regulatory complexity "creates a lot of compliance costs for banks," he said.
The Commission's blueprint also envisions granting the EBA and the European Systemic Risk Board a new mandate to "reinforce existing accountability processes" by carrying out regular reviews of how much capital banks maintain throughout the EU. Within that setup, Michaud emphasized, the Commission holds the competitiveness remit. "We can deliver expertise and assessments to them;" he said, "but I don't think that the political responsibility should be with a technical body." Translation for investors: a formal package is targeted for early 2027, and some changes could start in 2027 that, if realized, would chip away at red tape and operating costs across European banking.
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