ECB vice-president urges deeper banking integration over lighter capital rules

ECB Vice-President Boris Vujčić told the European Systemic Risk Board’s annual conference in Frankfurt on 2 October that simpler banking rules could help, but financial integration offered the stronger route to making European banks more competitive. Simplification alone, he argued, would not do much for competitiveness and must not weaken banks’ resilience. [1]

To illustrate the barriers to integration, Vujčić said lending across euro-area borders to non-financial firms accounted for around 16% of total corporate lending. Lending to corporate borrowers outside the euro area, chiefly in the US and UK, accounted for about 20% on the same basis. He called for completion of the banking union, including a European deposit insurance scheme, which he said would help build trust between countries. [1]

Vujčić also pointed to simplification proposals put forward by the ECB’s Governing Council in late 2025, including a plan to combine existing capital buffers into two and a simpler, conservatively calibrated regime for smaller banks. He said the ECB’s supervisory arm was pursuing measures that included discontinuing around 40 of its more than 100 guidance documents. [1]