Nordic reflections on Banking Competitiveness

Europe faces a historic investment challenge. Delivering on ambitions for competitiveness, defence, digitalisation, energy security and the green transition will require unprecedented levels of investment over the coming years.

A strong and competitive banking sector is essential to meeting this challenge. Banks remain the primary source of financing for European businesses and households and play a critical role in supporting growth, innovation and economic resilience.

Against this backdrop, the Nordic banking associations of Denmark, Finland, Norway and Sweden have published Financing the Future, a joint contribution to the European Commission's work on banking competitiveness and the upcoming Banking Package. The paper outlines how the regulatory framework can better support investment, growth and financial integration while maintaining financial stability. 

The Nordic recommendations focus on three priorities:

- Strengthening the Single Market for BankingDespite decades of integration, significant barriers remain for cross-border banking within Europe. Reducing regulatory fragmentation, limiting national gold-plating and enabling a more efficient use of capital and liquidity across banking groups would help create a deeper and more competitive European banking market.

Ensuring Proportionate and Competitive Regulation
International standards are important for financial stability, but their implementation should also reflect the realities of the European economy. The Nordic recommendations call for a more proportionate framework that supports lending to businesses, infrastructure and long-term investment, while preserving sound risk management and resilience.

Simplifying Regulation and Supervision
Over time, banking regulation has become increasingly complex. Streamlined rules, better coordination among authorities and more efficient reporting requirements would reduce unnecessary burdens and free up resources that can be channelled into financing households, businesses and Europe’s strategic priorities.

Looking Ahead
Europe's future prosperity depends on its ability to mobilise capital and finance investment at scale. Achieving this requires a banking sector that is resilient, innovative and globally competitive.

The Nordic banking sector stands ready to engage constructively in the discussions surrounding the upcoming Banking Package and to support reforms that strengthen Europe's capacity to finance growth, innovation and long-term competitiveness.