The EU has released a paper that prioritises competitiveness and cuts fragmentation in its banking sector. It argues that EU banks must stand up to global rivals—especially the US—in areas like investment banking, signalling a shift from safety‑first to performance‑first thinking.

Fragmentation remains a core weakness. Continental lenders are scarce commemorated, as national politics and regulation discourage cross‑border business. The new strategy makes this explicit, weighing the need for a country‑blind regulatory framework that would apply EU law exclusively to banks operating across borders.

Implementation is the hurdle. The Commission must set clear red lines and avoid giving the European Central Bank a veto that could be swayed by national coalitions. The strategy also notes the omission of the UK, stressing that post‑Brexit integration of UK and EU financial services is essential for mutual growth.

With clearer goals, progress is possible, but the EU must act decisively to turn policy into practice.