ECB’s Escrivá Urges Simplified Banking Framework

25 November 2025

By Marta Vilar – MADRID (Econostream) – European Central Bank Governing Council member José Luis Escrivá said on Tuesday that Europe should simplify the banking sector’s regulatory framework in order to boost competitiveness.

In a speech at the VIII Foro Banca organised by El Economista in Madrid, Escrivá, who heads the Banco de España, said that “the accumulation of rules and processes can affect the competitiveness of the [banking] sector and, ultimately, limit its ability to finance the economy.”

He said the involvement of numerous institutions in regulation created additional interlocutors, increased the risk of overlap and made it more difficult to maintain an integrated assessment of risks.

A “clear strategic push from the top” was needed, he said, adding that simplification should be at the center of that effort.

“Simplifying without reducing resilience is essential to increase competitiveness and, with it, strengthen the role of the financial system in the European economy,” he said.

According to Escrivá, streamlining the regulatory architecture did not mean loosening the rulebook or diminishing the sector’s solidity. Rather, institutions should aim for a simpler, more stable and more predictable framework, he said.

He outlined several areas in which he said the European regulatory and supervisory framework should be streamlined to enhance efficiency without undermining financial stability.

According to Escrivá, supervisory procedures should deliver “greater predictability, a more risk-oriented approach, and less complexity.” He also argued that capital and resolution requirements for banks would benefit from a simpler and more transparent design, provided resilience is preserved.

He further called for greater proportionality for small and non-complex institutions, noting that a lower risk profile should entail a reduced regulatory burden.

Escrivá observed that financial reporting requirements had increased by 50% over the past five years, adding that there was scope to remove duplications and ease the load on institutions.