The European Association of Co-operative Banks (EACB) welcomes the European Commission’s initiative on Better Regulation. The current accumulation of regulatory requirements—often introduced in response to crises or political priorities without sufficient streamlining of existing obligations—has created significant operational and strategic challenges. In the banking sector, this has diverted resources away from core functions such as financing households, SMEs and regional economies, towards compliance management. Regulatory proliferation, legal uncertainty and unclear implementation timelines increasingly weaken banks’ capacity to innovate, support growth and contribute to Europe’s competitiveness.
The EACB argues for a strategic shift towards regulatory prioritisation. This would include a temporary freeze on non-essential initiatives, fast-tracked assessments focused on material risks, and stronger ex ante coordination across legislative frameworks, especially for cross-cutting areas such as digitalisation, ESG and energy. Such an approach should be supported by preliminary impact assessment, which takes a new initiative not in isolation but takes into consideration also other legislative initiatives impacting the same set of entities, including economic impacts, designed to identify overlaps, regulatory gaps and interpretative uncertainty at an early stage, thereby facilitating smoother and cost-effective implementation for co-operative banks.
Stronger stakeholder involvement is needed for major regulatory projects with significant costs and impacts, alongside systematic and coordinated ex post evaluations. Such evaluations should assess the combined effects of horizontal and sector-specific legislation, enabling timely course correction and simplification where urgency-driven decisions have created unintended burdens. It should further ensure that delegated and implementing acts are used only where strictly necessary and remain closely aligned with the scope and intent of the level 1 legislation. This should also encompass systematic competitiveness and cost-benefit checks before new mandates are issued via level 2 and level 3 legislation. Better coordination among EU institutions, supervisors and agencies is essential to prevent legislative simplification from being undermined by level 2 and level 3 measures or divergent supervisory interpretations. The EACB also highlights the potential of digital public tools to improve transparency, accessibility and regulatory navigation for stakeholders, thereby reducing administrative burden.
As an immediate step, the EACB calls for a regulatory moratorium on new banking initiatives, combined with a comprehensive review of the existing framework, including level 2 and 3 measures. The sheer volume of technical standards, guidelines and Q&As has itself become a source of risk and legal uncertainty. Greater regulatory discipline, clearer mandates, realistic timelines, and well-defined boundaries for supervisory guidance are essential to restore clarity, proportionality and legal certainty. Ultimately, meaningful simplification must be operational, embedding proportionality by design and ensuring a level playing field, so that Europe’s banking sector remains competitive, diverse, innovative and resilient.
For the full EACB comment and analysis, please refer to the attached document.