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On April 17, 2026, the Japanese Bankers Association (JBA) submitted comments to the European Commission on its targeted consultation regarding the competitiveness of the European Union banking sector, which was released on February 11, 2026. The JBA, representing 242 members including 111 full member banks, expressed support for strengthening EU banking competitiveness while highlighting specific challenges facing third-country banks operating within the bloc. According to Bank for International Settlements data, Japanese banks hold claims on Europe totalling USD 1,318.5 billion. The JBA identified five key areas requiring attention: cross-border activity fragmentation, international competitiveness regarding remuneration rules, depositor protection harmonisation, regulatory complexity, and proportionality of supervisory approaches. The JBA emphasised that divergent implementation of EU banking rules across Member States, supervisory gold-plating, and non-harmonised insolvency regimes significantly increase compliance burdens for third-country banking groups. The association flagged provisions under the Capital Requirements Directive VI (CRD VI) relating to third-country branches and intermediate parent undertaking (IPU) requirements as introducing excessive organisational complexity and undue capital and liquidity constraints. The JBA also noted that remuneration policy restrictions place the EU at a competitive disadvantage relative to other financial centres, particularly London, in attracting and retaining talent. Additionally, the JBA advocated for harmonised deposit guarantee frameworks, greater flexibility in applying prudential requirements at group level, and proportionate treatment of subsidiaries and branches of banks headquartered in jurisdictions with equivalent regulatory standards, such as Japan. The association recommended enhanced international coordination through equivalence assessments and a phased approach to European Central Bank supervision designation. REFERENCES: Japanese Bankers Association. (2026). *Comments on Targeted Consultation on the Competitiveness of the EU Banking Sector*. Retrieved from European Commission consultation portal.