EU unveils banking reform plan to lift barriers, unlock investment

The European Commission on Friday unveiled a package of banking reform proposals designed to reduce fragmentation across the bloc's financial sector and help lenders operate more easily across borders. Officials said the plan could unlock billions of euros for investment in European businesses if adopted.

The proposals target long-standing barriers that have kept EU banking markets siloed along national lines, including differing capital and supervisory rules between member states. The Commission argued that a more integrated banking sector is essential for financing the bloc's green and digital transitions.

Banking industry groups broadly welcomed the plan, though officials acknowledged it faces significant hurdles, including resistance from member states protective of national oversight and lengthy negotiations in the European Parliament. The Commission said it hopes to advance the legislation within the current mandate.