The single rulebook is overflowing – it’s time to hit the brakes

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Following the regulatory rollercoaster of the last five years, the next European Commission will have the difficult task of slowing down the pace of rulemaking in finance, and consolidating what is already in place. However, with the Banking Union and the Capital Markets Union (CMU) as ongoing objectives, a staff of only around 2 600 people in financial supervision at EU level, review clauses for regulations every three to five years, as well as an ever-growing surge of financial lobbying in Brussels, applying the brakes is easier said than done.

The EU has added an impressive amount of new regulation under the von der Leyen Commission, with several pieces still in the pipeline. The regulatory framework affects capital market operators and infrastructures, investment, payments, crypto assets services providers (including prudential rules for banks and insurance companies), and a framework for digital resilience in financial institutions. On top of that all, an extra layer has been added with the Sustainable Finance Framework. As a result, and due to the objective of a single rulebook, rules have become increasingly detailed.

Karel Lannoo is General Manager of ECMI and CEO of CEPS.