More finance, less friction: how to simplify the EU’s financial regulation and strengthen supervisory structures
Europe’s financial regulatory and supervisory framework has delivered major stability and protection gains over the past two decades but it has become increasingly difficult to operate as a coherent single-market system.
The core challenge isn’t a lack of rules, but the frictions caused by how rules are designed, sequenced and applied across borders. These frictions translate into higher fixed costs, slower time-to-market and weaker incentives to scale cross-border activity. With the EU seeking to mobilise savings more effectively, deepen capital markets and support strategic investment under its Savings and Investment Union agenda, regulatory and supervisory usability has become a first-order competitiveness issue.
This report provides a comprehensive examination of how the EU’s regulatory and supervisory framework affects the competitiveness of its financial system, and what can be done to improve it.
'We are at a decision point in Europe: either we can continue layering complexity onto the existing framework, or we can bring regulation and supervision into line with our long-term growth objectives.'
José Antonio Álvarez, Vice Chair at Banco Santander and Chair of the Task Force
This report builds on the debates of the CEPS-ECMI-ECRI Task Force ‘Adjusting the EU’s regulatory process and supervisory structures’, formed in February 2025. It provides recommendations designed to address the root causes of the complexity of the EU's financial framework. They focus on two areas: improving the way financial rules are designed and adopted (regulation) and enhancing the way those rules are implemented and enforced (supervision).
Apostolos Thomadakis is Head of Research at ECMI, and Senior Research Fellow and Head of the Financial Markets and Institutions Unit at CEPS. Karel Lannoo is General Manager of ECMI and ECRI and CEO of CEPS. Judith Arnal is is Senior Research Fellow at CEPS and ECRI. To read a CEPS Expert Commentary that summarises the key findings of this report, please click here.