By Maria Martinez BERLIN, Feb 17 (Reuters) - France and Germany have urged the European Commission to bring forward an ambitious "financial services simplification package" to make EU rules easier to
Germany and France Propose Simplified Financial Rules for the EU
Proposals for Simplifying EU Financial Regulations
By Maria Martinez
Key Areas of Focus
BERLIN, Feb 17 (Reuters) - France and Germany have urged the European Commission to bring forward an ambitious "financial services simplification package" to make EU rules easier to navigate and less burdensome for firms, according to a letter seen by Reuters on Tuesday.
Impact on Small Banks
In the letter to Financial Services Commissioner Maria Luis Albuquerque dated Friday, German Finance Minister Lars Klingbeil and his French counterpart Roland Lescure identify several areas in which a simplification of EU Financial Services legislation is possible, while ensuring financial stability.
Future of EU Banking Regulation
"We need a dedicated and comprehensive Financial Services Simplification Package at European level that reviews the entire framework of European financial market regulation, ensuring coherence and effective implementation," the letter said.
Europe's relatively weak economic growth rates have long troubled policymakers and businesses, while efforts to integrate the region's disparate banking sectors have struggled.
Klingbeil said on Monday ahead of a meeting of finance ministers in Brussels that the EU was at a turning point in which countries should not hide behind national interests but accelerate progress to strengthen EU influence and sovereignty.
"This is a very European moment," Klingbeil said.
The German and French ministers argue that selective tweaks in future legislation are not enough and that the EU should also simplify rules already in force, with a view to strengthening the single market for financial services and improving the global competitiveness of European institutions.
In the U.S., President Donald Trump is pushing regulators to slash red tape - potentially handing Wall Street giants even more firepower - and UK regulators are also easing some rules.
Among specific areas flagged, the letter highlights streamlining reporting so that a financial market transaction only needs to be reported once, relying on established market practices instead of additional regulation, repealing unused delegated powers and simplifying rules for reporting cyber incidents.
SIMPLER RULES FOR BANKS
Rules must face the test of real-world results and be revised when they fail to deliver their promised value, the ministers said, giving the example of regulations for small banks.
"Banking regulation requires small banks to disclose data, even though there are indications that this data is not used by anyone," the letter says.
Europe's economy risks falling further behind other regions unless the European Union overhauls regulation that is undermining banks' ability to lend, the European Banking Federation warned in January.
The French and German ministers add that they are preparing input on banking regulation that they will share with the commission in due course.
"We are convinced: European banking regulation must become better and simpler to ensure that sufficient funds are available for investments in the real economy and the modernization of Europe," the ministers said in the letter.
(Reporting by Maria Martinez, Editing by Linda Pasquini, Alexandra Hudson)
