In an interview with MLex on 3 February 2026, Patrick Montagner, Member of the ECB Supervisory Board, discussed the competitiveness of the European banking sector and the ongoing debate around capital requirements.
Montagner emphasised that resilience defines competitiveness: banks are competitive when they can continue serving the economy without restrictions, even under stress. Lessons from the 2008 financial crisis show that reducing services during downturns amplifies economic shocks. Adequate capital and strong buffers enable banks to operate confidently.
Regarding proposals to link capital requirements to lending incentives or growth objectives, Montagner rejected the idea, stressing that capital exists to ensure bank safety, not to manipulate lending or dividends. He noted that EU credit is flowing efficiently and that any credit constraints are due to borrowers’ repayment capacity, not regulation.
On comparisons with US banks, he cautioned against simplistic claims of a “level playing field,” noting differences in regulation, insolvency, tax regimes, and market structures. While competition issues may exist in specific areas, like trading book regulations (FRTB), these need careful assessment without undermining resilience.
Montagner highlighted the importance of constructive dialogue between supervisors and banks, stressing that supervision is fact-based and non-arbitrary. He reaffirmed that lowering capital buffers is not the solution for bank profitability, and pointed to ongoing efforts to streamline supervision, focus on key risks, and reduce bureaucratic burden, including measures from the ECB’s “Streamlining supervision, safeguarding resilience” report.
Overall, he framed strong supervision and resilience as the foundation of competitiveness, rather than short-term adjustments to capital rules.
