As we approach the close of another transformative year for the banking sector, in this November edition we spotlight an insightful interview with Isabelle Vaillant, Director of Prudential Regulation at the European Banking Authority (EBA).
The banking industry stands at a pivotal crossroads. Over the past decade, we have witnessed a remarkable evolution in the regulatory environment, one that has strengthened the resilience and stability of our financial system, but also introduced new layers of complexity and compliance. The EBA’s recent initiative on improving the efficiency of the framework, addresses these challenges head-on, seeking to simplify and enhance the EU’s regulatory and supervisory framework.
The EBA’s 21 recommendations – ranging from streamlining regulatory mandates to reducing reporting burdens – are a much welcome sign of commitment to agility, proportionality and stakeholder engagement. These efforts are not only timely, aligning with broader EU priorities on competitiveness, but also essential for ensuring that regulation continues to support a dynamic and resilient EU banking sector to serve EU industry to grow.
As banks, we must balance robust oversight with the need to innovate and serve our customers effectively. I encourage you to read the interview and consider how these developments will shape our collective future.
3 Questions to
Isabelle Vaillant
Director of Prudential Regulation, EBA
3 Questions to
Anna Gallego
Director-General for Justice and Consumers at the European Commission
Isabelle Vaillant is responsible for delivering the EBA's prudential and resolution policy work as well as for overseeing the implementation of the standards with a view to ensuring a harmonised supervisory and resolution set of approaches across the EU. From 2011 to 2018, Isabelle was responsible for the production of the EBA regulatory work. Prior to this appointment, she was Head Inspector for on-site examinations at the French Financial Markets Authority. Between 1996 and 2010, Isabelle held several positions within Banque de France.
Could you describe the broad goals of your initiative and why you published the report now?
The primary aim of our initiative is to ensure that the EU’s regulatory and supervisory framework remains robust, effective, and adaptable to the evolving financial landscape. Over the past decade, the regulatory environment has become increasingly complex, reflecting the growing sophistication of banking activities but also the need for greater resilience in the financial system following the great financial crisis. While the extended prescriptiveness has contributed to a more harmonised and stable Single Market, it has also resulted in a heavier compliance burden for both institutions and supervisors.
Recognising these challenges, the EBA undertook a comprehensive review of our regulatory and supervisory processes. We focused on four key areas: the development of Level 2 and Level 3 regulatory products, the reporting obligations for financial institutions, the EBA’s role in shaping the prudential regulatory framework, and our own internal operations. The timing of this report is significant, as it aligns with a broader EU-wide movement towards simplification and competitiveness, as emphasized by recent European Council conclusions and the Budapest Declaration on the New European Competitiveness Deal.
We believe that 15 years after the outburst of the great financial crisis and the upgrade of the European set-up in banking regulation and supervision having restored robustness and confidence, it is the right moment to assess what has been achieved, identify areas for improvement, and propose targeted actions that will benefit the market and customers. Our goal is to strike a balance between maintaining the resilience of the system and reducing unnecessary complexity, ensuring that regulation supports innovation and competitiveness without compromising stability. This initiative is also a response to feedback from stakeholders, including cooperative banks, who have called for a more proportionate and efficient regulatory environment.
What is the EBA proposing?
The EBA’s report presents 21 specific recommendations designed to enhance the efficiency and proportionality of the EU’s regulatory and supervisory framework. These recommendations are organised around four main pillars:
First, regarding regulatory mandates, we are introducing a materiality assessment methodology to prioritise Level 2 and Level 3 mandates. This approach ensures that new mandates are necessary and impactful, and our analysis suggests that up to 20% of current flow of mandates could be deprioritised, thereby reducing unnecessary regulatory complexity. We will continue assessing the existing L2 using the same criteria, with the aim of eliminating provisions that areless useful or efficient. This process will be carried out in building blocks, starting with areas such ascredit risk, governance, resolution or ESG, which we have identified as important priorities.
Second, in the area of reporting, we propose a comprehensive review of reporting requirements. Our aim is to further reduce the reporting burden on institutions, building on previous achievements such as a 20% reduction in reporting costs for small and non-complex institutions. We are collaborating closely with the ECB and national authorities to integrate prudential, resolution, and statistical reporting, and to harmonise both EU and national requirements.
Third, the EBA will continue to provide expert feedback to co-legislators, advising on the efficiency and proportionality of new and existing regulations, and supporting the implementation of the Single Rulebook. This will help ensure that the regulatory framework remains coherent and effective across the EU.
Finally, we are committed to optimising our internal processes and strengthening cooperation with national authorities. This includes making our work more transparent, predictable, and value-adding. All these proposals are guided by the principles of resilience, support for the Single Market, and a commitment to proportionality and avoiding fragmentation. Our recommendations are designed to create a more agile and responsive regulatory environment that benefits all stakeholders, including cooperative banks.
Could you elaborate on the timeline along which the EBA will address the proposals of the Report?
The implementation of our recommendations is structured across several timeframes to ensure a phased and effective approach. We have already identified the mandates to be deprioritised and have made this clear in our work programme for 2026. By the beginning of 2026, we plan to deliver a first set of actions to be discussed in the areas mentioned above. Stakeholder engagement will be sought. This initial phase will lay the groundwork for substantial changes in the following years.
In 2026, this will coincide with the launch of a comprehensive review of national and EU reporting requirements. Our focus will shift to integrating reporting frameworks, further reducing reporting burdens, and embedding proportionality into our regulatory products and supervisory practices.
Looking further ahead, in the medium to long term (beyond 2026), the EBA will continue to monitor and adjust its approach as needed. We will work closely with co-legislators and stakeholders to ensure that the regulatory and supervisory framework remains efficient and effective as the financial sector evolves. Our work programme for 2026 and beyond is shaped by these recommendations, and we are committed to providing regular updates and maintaining transparent communication with all stakeholders, including co-operative banks. This ongoing engagement is essential to ensure that our reforms deliver tangible benefits and support the long-term stability and competitiveness of the EU financial sector.
Reflections from
Mike Velthaak
Senior Advisor to the Board, Rabobank &
Chairman of the Banking Regulation Working Group, EACB
Mike Velthaak advises the Board of Rabobank regarding topics that are related to the Banking Union and Capital Markets Union. He is member of the General Assembly of the EACB, as well as chairman of the EACB Banking Regulation working group. Furthermore, he participates in the EACB banking recovery and resolution working group and the EBF statistics & reporting working group. He has a seat in the BIRD (ECB) steering committee. Finally, he fulfils similar roles representing Rabobank within the Dutch Banking Association.
I’m very happy to see that EBA but also ECB are taking the “simplification” request of the European Commission seriously. I build this opinion on the meetings we had with both authorities in autumn 2025. Besides these meetings the EACB banking regulation working group has been working in the course of 2025 to prepare their own input to this discussion, which is nearing finalisation and will be shared with the European Commission.
Seventeen years after the financial crisis, Europe has set up a robust supervision framework. It set up the Single Supervision Mechanism and a Single Resolution Regime, harmonised Deposit Guarantee Systems and increased the quality of its prudential regulation significantly, by implementing the one rulebook. This also has led to increased capital, liquidity and leverage requirements and a thorough review of the banks internal models. All this is to the benefit of Europe and the banks customers that have regained trust to put their money in saving accounts. Also supervisors like EBA and the ECB are expressing that the current prudential level are satisfied. However, the framework has become too complex, as the EACB has also expressed in its contribution to the less is more report and it was recognised by the European Commission and the supervisory authorities.
In order to ensure that the EU’s regulatory and supervisory framework remains workable in the next 15 years, simplification has to be performed without a race to the bottom regarding capital requirements. The 21 specific recommendations by EBA is a good first step. However, regarding simplification the EACB proposes amongst other things:
To implement a regulatory moratorium while reviewing and simplify the current framework
Increase regulatory and supervisory discipline as banks (but also EBA) were squeezed by the fact that the co-legislators were not able to agree on last updated Capital Requirements Regulation without postponing the date the regulation became effective. This also includes that the procedures how delegated regulations are produced needs to be reviewed to make them more efficient.
Simplify the buffer framework and eliminate EU specific buffer requirements.
Simplify the prudential reporting.
We are keeping our eyes and ears open to help Europe to improve this framework.
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