European Central Bank Reportedly Looking to Simplify Banking Rules

The European Central Bank (ECB) has reportedly created a task force to simplify Europe’s banking rules.

The task force is chaired by ECB Vice President Luis de Guindos and also includes the central bank governors of Germany, France, Italy and Finland, Reuters reported Saturday (April 26), citing a source familiar with the matter.

Reuters noted that the ECB has no authority to change rules, which are set by the European Union. Recommendations from the task force would need to be considered by lawmakers.

Earlier this year, the report added, the central bank governors from Germany, France, Italy and Spain wrote a letter to the European Commissioner Maria Luis Albuquerque, calling for the simplification of “unduly complex” European banking rules.

“A comprehensive analysis of the implications of all the standards produced in Europe should be carried out … to ensure that they do not cumulatively add unintended layers of rules and expectations,” the governors wrote in their letter.

They said this review could bring about “a legislative proposal … with concrete and realistic simplification measures.”

According to Reuters, the ECB’s Chief Supervisor Claudia Buch defended Europe’s “complex” rules last week during an event in Washington.

“It is sometimes argued that banking rules are too complex,” she said. “But … for regulation to effectively address the industry’s specific needs and vulnerabilities, it must be sufficiently detailed.”

In other banking regulation news, two American regulators — the Federal Deposit Insurance Corp. (FDIC) and the Federal Reserve — recently withdrew warnings that had cast a pall over banks’ involvement with cryptocurrencies.

In announcing the decision last week, the Fed and FDIC said they hope to signal a new regulatory openness to banks engaging in digital asset activities, as long as they do so prudently and inside the bounds of the law.

The regulators withdrew joint statements that were issued in 2023, addressing crypto-asset risks and liquidity risks resulting from crypto-asset market vulnerabilities. The Federal Reserve is also rescinding its 2022 supervisory letter calling on state member banks to provide it with advance notification of crypto-asset activities, as well as its 2023 supervisory letter regarding “the supervisory nonobjection process for state member bank engagement in dollar token activities.”

Another banking regulator, the Office of the Comptroller of the Currency (OCC), reclarified some of its crypto banking permissions last month.

The post European Central Bank Reportedly Looking to Simplify Banking Rules appeared first on PYMNTS.com.