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Italy is at the forefront of calls for simplification of European banking rules
The Governor of the Bank of Italy, Fabio Panetta, together with his colleagues Joachim Nagel (Germany), François Villeroy de Galhau (France) and José Luis Escriva (Spain), has urged the European Commission to review the banking regulatory framework, with the aim of making the system more competitive globally. Italy, with its experience and key role in the financial sector, stands out for its leadership in promoting fairer and more rational regulation.
Italy and the competitive challenge with US banks
European banks, and Italian ones in particular, have demonstrated great solidity and resilience in recent years, but they risk being disadvantaged by the deregulation underway in the United States. The Trump administration has started a process of reducing the regulatory burden for American credit institutions, in particular with the revision of the Basel 3+ regulation. While supporting the need for robust rules to protect financial stability, Italy promotes a pragmatic approach aimed at eliminating regulatory inefficiencies that hinder the growth and competitiveness of European banks without compromising the safety of the system.
Italy’s key role in reviewing banking regulation
Panetta and his colleagues stressed the urgency of developing a comprehensive assessment of European banking rules, with a particular focus on simplifying the rules defined by supervisory authorities, such as the EBA and ESMA.
Italy, in particular, stands out for its commitment to promoting:
More effective and flexible regulation, which takes into account national specificities and fosters economic development without excessive rigidity. A review of the rules on bank resolutions, refining crisis management mechanisms to avoid unjustified burdens on credit institutions. Harmonization with international standards, to avoid competitive disadvantages compared to other large economies.
Italy leads the political initiative for banking competitiveness
At the government level, Italy has also taken a leading role in calling for regulatory intervention. The Italian government, together with those of Germany and France, has urged the European Commission to present a regulatory review by the first quarter of 2024, with concrete recommendations by the end of the year and a final document expected in June 2026.
The main proposals supported by Italy include:
An update of Basel 3+, in light of the choices made by the United States and the United Kingdom.
A simplification of banking regulations, reducing bureaucratic complexity and promoting greater operational efficiency.
Greater flexibility in macroprudential regulation, to adapt to market needs without penalizing rigidities.
A relaunch of securitization with EU guarantees, to strengthen banks’ financing capacity and support the real economy.
Balanced environmental rules, with a review of the Green Asset Ratio to ensure a realistic approach to the ecological transition.
The Italian vision for the future of the European banking system
Piero Cipollone, member of the Executive Board of the ECB, highlighted another crucial aspect: the reduction of the Eurosystem balance sheet (Quantitative Tightening), which in 2024 could lead to a reduction in loans of around 75 billion euros. In this context, Italy underlines the need for a balance between monetary policies and banking regulation, refining decisions on interest rates to avoid an excessive tightening of credit conditions.
Thanks to its strategic vision and its central role in the European economic landscape, Italy confirms its leading role in the push towards a more modern, competitive and growth-oriented banking system. The initiative led by Panetta and supported by the Italian government represents a decisive step to ensure that European banks, and in particular Italian ones, can compete on equal terms with the large international giants, while guaranteeing stability and development for the entire economy of the continent.
Alessandro Fiorentino