In the run-up to their industry meeting in Berlin, the German commercial banks published a comprehensive list of demands for politicians. The sector expects the German government to improve the conditions for investment, and increase growth potential again. In turn, the next EU Commission needs to rapidly make progress on the single market, and improve competitiveness. „We need far reaching structural changes,“ said the President of the Association of German Banks (BdB), Christian Sewing.

According to the Deutsche Bank CEO, Germany currently does not have a positive outlook with regard to once again achieving a sustainable level of higher economic growth. And unfortunately he sees no political consensus on fundamental reforms. „Numerous strikes and protests since the beginning of the year have reinforced the impression that our Republic is at a standstill in places, and is hindering itself," he said. More public and, above all private investment, is urgently needed.

Among others, Federal Chancellor Olaf Scholz (SPD), Finance Minister Christian Lindner (FDP) and CDU General Secretary Carsten Linnemann attended the German Banking Congress on 22 and 23 April. Sewing's specific demands to the politicians included relief on corporate taxes, a further reduction in bureaucracy, planning security for the energy transition, and stronger work incentives. In addition, the government should rely more on market forces and limit intervention to a minimum. Sewing described the "infrastructure fund“ proposed by Transport Minister Volker Wissing (FDP) as an interesting idea.

However, the banking association is currently also focusing on the upcoming elections to the EU Parliament in June, and the subsequent formation of a new European Commission. With regard to the recent EU Summit, Sewing pointed out that Capital Markets Union is now higher up on the political agenda in Brussels than it has been for years. This opportunity must be seized at all costs. „The issue must not take a back seat again after the European elections," he emphasised the BdB President. Rather, Europe must now "shift up two gears“ with regard to Capital Markets Union.

Sewing pointed out that Europe's share of the global capital markets fell from 18% to just 10% between 2006 and 2022. The EU can no longer afford fragmented and underdeveloped markets,. Without CMU, there will also be no Green Deal in Europe.

According to Sewing, the new EU Commission must also move quickly to review financial market regulation, which has become increasingly complex, expensive and sprawling in recent years. He argues that the strategic sovereignty that Europe is striving for is closely linked to financial sovereignty. And if Europe wants to become more independent, it also needs stable banks that can hold their own in global competition. It is important that European banks are not at a regulatory disadvantage.

The industry is currently particularly concerned about the planned introduction of the new Basel III capital requirements in Europe, which takes place on January 1, 2025. Sewing pointed out that both the USA and the UK are planning to implement the regulations at a later date. There are also signs of a relaxation of the rules in these countries, which would give the banks there considerable competitive advantages in capital market business.

The association therefore calls on the EU Commission to take action, and postpone the introduction of Basel III. „We need a solution that takes into account the individual characteristics of European banks,“ the BdB President made clear. A level playing field in the banking sector is important. He added that it is positive that politicians in Brussels have at least already recognised the problems with Basel III.