European Banking Federation warns that strict regulations are restricting regional lending and economic growth

The European Banking Federation has issued a sharp warning to the European Commission, led by President Ursula von der Leyen ursula von der leyen, stating that existing banking regulations are significantly restricting the ability of financial institutions to lend. This regulatory environment threatens to place the economy of the EU EUat a disadvantage compared to other global regions. The federation emphasized that the current rules are stifling growth and creating barriers to essential credit flow across the continent.

A key concern raised in the letter is that 15 major European banks have been forced to hold more than 100 billion euros in additional capital due to various discretionary supervisory measures. This requirement has led to a massive reduction in liquidity, with an estimated 1.5 trillion euros in potential lending capacity being lost to the market. Slawomir Krupa slawomir krupa, representing the banking sector and specifically Societe Generale GLE.PA, has highlighted how these capital constraints impact the broader financial health of the region.