The European Commission unveiled a sweeping banking reform package on 17 July 2026, framed partly as a response to US financial deregulation under the Trump administration. Financial Services Commissioner Maria Luis Albuquerque said EU banks “lack scale to compete both internationally and domestically.”
Key proposals in the package
- Deposit insurance (EDIS): Scrap the stalled 2015 EDIS proposal and replace it with a new framework designed to break the decades-long political deadlock on EU-wide deposit insurance.
- Bonus cap: Revisit the existing rule that limits banker pay to twice base salary — a measure long opposed by UK-based banks.
- Cross-border consolidation: Simplify supervisory rules to encourage EU-wide banking mergers, reducing friction for pan-European banks operating across member state boundaries.
- Capital framework simplification: Address national gold-plating (where individual member states apply stricter rules on top of EU minimum standards) and harmonise the regulatory floor.
- EBA competitiveness mandate: Signal a potential mandate for the European Banking Authority to formally incorporate EU competitiveness into its supervisory work.
Legislative timeline
The European Commission must deliver concrete legislative proposals by end of March 2027. The European Parliament and Council will then negotiate final legislation, meaning full implementation is unlikely before 2029–2030.
What this means for EU neobanks
For neobanks operating across multiple EU markets — Revolut, N26, bunq, Monzo — cross-border simplification is a long-term positive. Regulatory fragmentation (different national regulators applying different interpretations of EU rules) is a persistent cost driver. A genuine reduction in gold-plating would lower compliance overhead. EDIS progress would also improve the deposit insurance comparability story for neobanks whose customers currently hold deposits in a mix of Lithuanian, German, Dutch, or Irish banking entities depending on which neobank they use.
Note: These are proposals only — no legislation has been finalised. Neobank customers should not expect any product or deposit protection changes until at minimum 2028–2029.
Source: https://www.euronews.com/business/2026/07/17/eu-unveils-banking-reform-plan-to-lift-national-barriers-and-unlock-investment