Commenting on the submission, Brian Hayes, Chief Executive of BPFI, said: “BPFI welcomes the Commission’s recognition that a stronger, more integrated banking sector is a key building block for a competitive European economy. 

"The EU remains a largely bank‑based financial system, with banks playing a critical role in financing the real economy. Sustainable economic growth, therefore, depends on banks having the capacity to lend.” 

“However, the cumulative layering of capital requirements since the financial crisis has added unnecessary complexity, with limited additional financial stability benefits. This has constrained banks’ ability to ensure capital flows efficiently to households, businesses and strategic EU priorities, including the green and digital transitions."

Mr Hayes also noted that wide variations in the application of capital and macroprudential measures across Member States undermine the level playing field within the Single Market, disproportionately affecting smaller Member States such as Ireland. 

BPFI’s submission calls for several key priorities, including streamlining and simplifying the regulatory framework, updating the capital framework to ensure it accurately reflects underlying risk, embedding genuine proportionality across the banking framework and completing the Banking Union to unlock scale and efficiency.

The federation is also calling for a level playing field within the EU and globally, and support for market liquidity and effective capital markets intermediation.

Pointing to opportunities for reform, Mr Hayes added: “The sector is not calling for deregulation. Rather, we are advocating for a more effective and efficient regulatory framework that preserves financial stability while reducing unnecessary complexity, supporting growth and enabling capital to flow where it is most needed across the Single Market.” 

Mr Hayes concluded: “European and Irish banks have demonstrated strong resilience in recent years. They are well-capitalised, highly liquid, and supported by materially improved underwriting standards, risk governance, and supervision. 

"The policy focus must now shift towards simplification, proportionality and deeper integration. Our response offers practical recommendations to strengthen competitiveness and support sustainable economic growth, and we look forward to continued constructive engagement with the Commission and other stakeholders.”