France and Germany have called on the European Commission to fast-track a sweeping overhaul of the EU’s financial services rulebook, warning that overlapping requirements and extensive reporting obligations are undermining competitiveness and driving up compliance costs across the bloc.
In a joint letter to Financial Services Commissioner Maria Luís Albuquerque, the two governments urged Brussels to bring forward a broad “financial services simplification package”, said EU Today.
Rather than minor technical amendments, Paris and Berlin are seeking a more comprehensive rethink of both existing and forthcoming legislation to improve coherence across frameworks while preserving financial stability.
The appeal comes as Commission President Ursula von der Leyen advances a wider simplification agenda across EU policy. Addressing the European Parliament earlier this month, she argued that complex and fragmented regulatory structures are limiting Europe’s ability to compete globally. She highlighted the continued fragmentation of the EU’s financial system, including 27 national regimes and hundreds of trading venues, and linked regulatory streamlining to plans for a deeper savings and investment union.
According to details of the letter reported by Reuters, France and Germany want a package that reduces duplication between legislative texts and trims reporting obligations that do not meaningfully enhance supervision or market integrity. A particular focus is transaction reporting, where financial institutions often file similar or overlapping data under multiple regimes. The two governments argue that cutting redundant reporting would lower costs without weakening oversight.
The proposals also include repealing unused delegated powers in existing legislation to reduce regulatory uncertainty and prevent the gradual accumulation of technical requirements that may never be implemented. Paris and Berlin further advocate easing certain reporting duties, including those related to low-severity cyber incidents and to smaller banks, where they contend that the administrative burden can outweigh the supervisory benefit.
Beyond reporting reforms, the initiative extends to banking regulation more broadly. Reuters reported that additional proposals are expected to strengthen the link between the financial system and investment in the real economy, as part of a broader modernisation drive across Europe.
The Franco-German push builds on political momentum within the Council. In December 2025, EU finance ministers adopted conclusions emphasising the need to reduce unnecessary complexity in financial services regulation, while maintaining prudential resilience, consumer protection and anti-money laundering safeguards. Around the same time, the European Central Bank outlined proposals to streamline the EU’s capital buffer framework without lowering overall capital requirements, including consolidating buffers and adjusting aspects of the leverage regime.
A recurring theme in official commentary is the distinction between simplification and deregulation. Policymakers have stressed that a leaner rulebook does not necessarily imply weaker safeguards, though the boundary between the two remains politically sensitive, particularly given the post-2008 reforms that underpin the current framework.
Industry bodies such as the European Banking Federation have long argued that cumulative regulatory layers, including newer digital resilience and sustainability obligations, have increased compliance burdens. For firms operating across borders, complexity can limit their ability to channel capital efficiently to households and businesses.
For the Commission, the challenge will be to design a cross-cutting package that reduces duplication and administrative costs without reopening contentious debates about the strength of EU financial safeguards. Any proposal would require negotiation with member states and the European Parliament, where views differ on supervisory centralisation and the balance between bank-based finance and capital markets.
However, with Brussels already committed to a multi-year single market roadmap and deeper financial integration, the Franco-German letter adds fresh pressure for tangible progress on simplifying the EU’s financial rulebook.
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