Germany’s Chancellor Friedrich Merz has criticized the excessive strictness of banking regulations in the European Union. In his view, European requirements for financial institutions hinder credit flow to the economy and weaken the competitiveness of European banks against their American counterparts, which benefit from a more lenient regulatory approach under Trump’s administration. Merz emphasized that while banking regulation is necessary, the current level of restrictions in Europe is "overly stringent" and needs to be revised.
The Chancellor acknowledged that the right decisions were made to strengthen the banking system following the global financial crisis of 2008. The current capital levels of European banks reflect their resilience. However, Merz points out that the environment in the US and other parts of the world creates many more opportunities for lending and corporate financing. He stressed that a more flexible regulatory approach would enable banks to actively extend credit to companies, which is critically important for economic development.
European policymakers and bankers are increasingly calling for the easing of regulatory requirements. This push stems from the need for massive investments in the defense industry, digital technologies, and climate initiatives. Financial institutions in Europe lament that they are losing the competitive battle to American banks, which operate under a more favorable regulatory environment.
Germany is prepared to alleviate the burden on banks by implementing the Basel III capital standards in a targeted manner, without additional tightening. Friedrich Merz stated that his country would adopt European requirements in their original form, without any further restrictions. This decision is expected to help German and European financial institutions increase their lending capabilities and reinforce their positions in global competition.
