Top European bank CEOs demand moratorium on capital hikes

The heads of eleven of Europe's largest banks have banded together to pressure EU leaders into accelerating regulatory changes they say are needed to unlock lending across the continent, according to Bloomberg.intereconomia

In a joint letter addressed to European Commission President Ursula von der Leyen and European Central Bank President Christine Lagarde, the chief executives of Banco Santander ↘ 3.44%, BNP Paribas, Barclays ↘ 3.00%, and UBS ↗ 0.14%, among others, called for an immediate moratorium on any new capital increases while the EU develops its broader reform package.intereconomia

The bankers argued that Europe's "acute funding needs" cannot wait for the legislative timeline currently envisioned by the European Commission, which has pledged to deliver proposals in the first quarter of 2027.bloomberg+1

A Reform Agenda Already in Motion

The letter arrives as the Commission is in the final stretch of a public consultation on its banking competitiveness agenda, with a feedback period open until September 17. In July, the Commission published a landmark communication outlining three pillars of reform: allowing cross-border banks to manage capital and liquidity more efficiently at the group level, adapting global Basel III standards to European lending patterns, and simplifying what it called an "unduly complex" regulatory framework.euperspectives+2

The Commission estimated that easing rules on cross-border capital and liquidity management alone could free up more than €230 billion in high-quality liquid assets currently trapped along national lines. It also proposed cutting bank reporting requirements to regulators by half.euperspectives

Banks Want Action Now

The European Banking Federation had already signaled impatience with the pace of reform in July, calling on policymakers for speed while noting that Europe's annual investment gap had ballooned to €1.4 trillion, up from €800 billion estimated in 2024.ebf

The eleven bank chiefs appear to have gone further, insisting that regulators halt any additional capital demands in the interim. Their concern reflects a longstanding industry complaint that layered capital buffers, stress-test add-ons, and overlapping supervisory requirements have constrained European banks' ability to compete with US rivals and to finance the continent's defense, digital, and green transitions.efr+1

With the Commission's legislative package still months away, the letter puts direct pressure on von der Leyen and Lagarde to provide near-term relief — a request that will test how far Brussels is willing to go before formal proposals are tabled.