France and Germany have called on Brussels to fast-track a wide-ranging simplification of the EU’s financial services framework, warning that overlapping rules and heavy reporting duties are undermining competitiveness and raising compliance costs for banks, insurers and market participants across the bloc.
According to EU Today, in a joint letter to Financial Services Commissioner Maria Luís Albuquerque, the two governments urged the European Commission to table a comprehensive “financial services simplification package”.
Rather than minor technical amendments, Paris and Berlin argue that a broader overhaul is required to streamline both existing and forthcoming legislation while preserving financial stability.
The push comes as the Commission expands its wider simplification agenda. Commission President Ursula von der Leyen recently told the European Parliament that complex and fragmented regulatory frameworks are hampering Europe’s ability to compete with other major economies. She highlighted the persistence of 27 national regimes and hundreds of trading venues as evidence of continued fragmentation, linking regulatory streamlining to ambitions for a deeper savings and investment union.
According to reports, France and Germany want the Commission to reduce duplication between legislative texts, improve coherence across regimes and scale back reporting obligations that do not materially enhance supervision or market integrity. Among the areas flagged for review are transaction reporting requirements, with a focus on cutting repeated or redundant filings across multiple frameworks.
The letter also advocates greater reliance on established market practices where regulatory objectives can be achieved without layering additional prescriptive rules. In parallel, the two governments propose repealing unused delegated powers in existing legislation, arguing this would reduce uncertainty and limit the accumulation of technical requirements that are never activated.
Reporting burdens are another central concern. Paris and Berlin suggest easing obligations in areas such as low-severity cyber incident reporting and for smaller banks, where they believe the administrative load can be disproportionate to the supervisory value generated.
The initiative extends beyond capital markets. Further proposals on banking regulation are expected, aimed at strengthening the link between the financial system and investment in the real economy as part of broader European modernisation efforts.
The call builds on conclusions agreed by EU finance ministers in December 2025, which emphasised the importance of reducing unnecessary complexity while maintaining prudential resilience, consumer protection and anti-money laundering safeguards. Around the same time, the European Central Bank outlined ideas to streamline the EU’s capital buffer structure without lowering overall capital requirements, including consolidating buffers into broader components and refining elements of the leverage framework.
A recurring theme in official commentary is the distinction between simplification and deregulation. Policymakers have stressed that a more efficient rulebook need not weaken financial resilience, though the boundary between the two remains politically sensitive.
At the heart of the Franco-German argument is the cumulative effect of post-crisis regulation, subsequent digital resilience measures and the steady expansion of reporting duties. Industry bodies have previously warned that mounting complexity can constrain the sector’s ability to support households and corporate investment.
Any Commission proposal would still require negotiation among member states and the European Parliament, where national priorities differ on supervisory centralisation and the balance between bank-based finance and capital markets. However, with the Commission already committed to a multi-year single market roadmap and a deeper savings and investment union, pressure is mounting for tangible proposals that reduce duplication and compliance costs without reopening debates about the core safeguards introduced after 2008.
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