Published by Global Banking & Finance Review®
Posted on February 19, 2025
2 min readLast updated: January 26, 2026
Add as preferred source on Google
Fabio Panetta of the ECB suggests Europe simplify banking rules to maintain competitiveness amid U.S. de-regulation trends and crypto market changes.
MILAN (Reuters) -Europe must avoid excessive regulation and could also consider simplifying existing rules, European Central Bank Governing Council member Fabio Panetta said on Wednesday.
Addressing the steering committee of Italian Banking Association ABI, Panetta said it was important to see the first actual steps the U.S. administration would take after it called for de-regulation in banking and for making crypto assets more mainstream.
"The United States are preparing to de-regulate, possibly too much, and Europe keeps regulating, possibly too much," Panetta said.
Were the United States to embrace wide-ranging de-regulation Europe should avoid doing the same. However, it should also consider simplifying its existing set of banking regulations, Panetta said, adding he had written to the European Commission with three other central bankers on the topic.
"Excessive regulation should always be avoided, all the more so if the world starts going in a different direction because it would engender a competitive disadvantage (for European lenders)", he said.
"Given existing rules, we need to assess all options to simplify them and make life easier for market participants," he added.
Panetta expressed concerns about a recent U.S. presidential order allowing traditional banks to operate on crypto trading venues.
"More than an 'allowing' it sounds like an 'urging'," Panetta said. "I'll remind you that all the disasters that have happened so far in the crypto world did not involve the banks because so far these two worlds have been kept, very wisely, separate."
Turning to monetary policy, Panetta said the main downward risk for euro zone inflation came from the weakness of the bloc's economy, where a consumer-driven recovery the ECB had expected had not materialised.
"The signs of weakness in the euro zone economy are more persistent than we had anticipated," he said.
Upward risks come instead from energy prices but at the moment the expectation is that inflation is trending towards the ECB's 2% target.
(Reporting by Valentina Za and Sara Rossi; Editing by Giselda Vagnoni and Keith Weir)
The main topic is the suggestion by ECB's Fabio Panetta for Europe to simplify its banking regulations to avoid excessive regulation.
Excessive regulation could create a competitive disadvantage for European lenders, especially if the U.S. moves towards de-regulation.
Panetta is concerned about U.S. banks entering crypto trading venues, which could lead to risks previously avoided by keeping banks and crypto separate.
Explore more articles in the Finance category
