EU set to remove barriers to banks' cross-border capital flows, FT reports

The European Commission is set to propose reforms to boost EU banking competitiveness, including removing barriers to cross-border fund transfers and capital relief for mortgages and loans.

The European ​Union is set to ​remove barriers preventing banks from moving ‌funds ​across the bloc, the Financial Times reported on Thursday, citing a draft European Commission report.

• The proposals in ‌the draft report on EU banking competitiveness are aimed at boosting performance of EU lenders compared to their U.S. rivals and also outline possible capital relief on mortgages ‌and loans to unrated companies, the FT said. • It also proposes ‌plans to reform the structure of bank deposit insurance schemes and to review capital requirements for investment firms, the report added.

• Reuters could not immediately verify the report. The European ⁠Commission ​did not immediately ⁠respond to a request for comment. • Europe's banks have said the current regulatory framework is constraining ⁠lending, with the European Banking Federation estimating the bloc faces a widening €1.4 trillion ($1.62 trillion) annual ​investment gap that risks holding back its economic objectives.

• According to the ⁠FT, the proposal would give banking groups greater flexibility to allocate resources across borders, tackling concerns ⁠that ​national requirements force lenders to hold excess capital and liquidity in local subsidiaries. • The report also comes a day after Europe's antitrust chief Teresa ⁠Ribera urged EU countries to back cross-border bank mergers to help complete the ⁠single market.

• ⁠The European Commission assessment of banking sector competitiveness is expected in July, with legislative proposals likely to follow in 2027.