Claudia Buch: Simplification without deregulation - European supervision, regulation and reporting in a changing environment

Speech by Prof Claudia Buch, Chair of the Supervisory Board of the European Central Bank, at the Goldman Sachs European Financials Conference, Berlin, 11 June 2025.

The views expressed in this speech are those of the speaker and not the view of the BIS.

The environment in which European banks are operating is changing fast. Technology is evolving rapidly, transforming how financial services are delivered and information is processed. Banks need to adapt their business models to sustain their long-term profitability. The risk landscape has changed significantly; geopolitical uncertainty is high. This requires good risk management, supervision, and regulation. At the same time, the benefits of post-financial crisis reforms are increasingly being questioned, the current supervisory and regulatory framework is being criticised as excessively complex. A weakening of global rules that help keep the financial system safe and sound is a real risk.

Simplification without deregulation requires strong guardrails. Simplification means maintaining resilience with a more effective and efficient supervisory and regulatory framework; deregulation means weakening regulation and supervision at the expense of resilience. In practice though, it can be difficult to draw a clear line between simplification and deregulation. The current rules are not there because the framework has intentionally been made too complex. Rules and procedures are there for a reason.

Ensuring that simplification does not weaken resilience requires an evidence-based, European reform agenda that enhances efficiency and effectiveness.