meta_id 3069387

On April 16, 2026, Finance Norway submitted a response to the European Commission's consultation on competitiveness in the European banking sector. The submission calls for a simplified banking regulatory framework and reduced national discretion in implementing regulatory measures. Finance Norway emphasises that the cumulative compliance burden on banks has become excessive, particularly for small and less complex institutions. The organisation advocates for a more targeted regulatory approach where low-risk banks and activities are subject to simplified reporting requirements and less stringent demands. Erik Johansen, director of banking and capital markets at Finance Norway, states that simplifications must not undermine risk sensitivity in regulatory requirements or banks' incentives for sound risk management. The submission highlights that current regulations grant national authorities excessive discretion to tighten capital requirements for banks, resulting in inconsistent implementation across member states. Finance Norway calls for a regulatory framework with reduced national discretion and stricter European Union-level coordination to achieve more harmonised use of macroprudential tools. The organisation supports automatic reciprocity, whereby measures automatically apply to foreign banks with exposures in countries implementing them, which it argues would create more level competitive conditions and improve capital planning predictability. Finance Norway also recommends that authorities enable banks to deploy capital buffers during economic downturns to maintain economic activity, consistent with the buffers' intended purpose. The submission notes that the European Union's comprehensive crisis management framework for banks, requiring sufficient loss-absorbing capacity, reduces the need for overly conservative capital requirements and permits more proportionate, risk-sensitive capital regulation without compromising financial stability. REFERENCES: Finance Norway submission to European Commission consultation on banking sector competitiveness (April 16, 2026): https://www.finansnorge.no/