The European Society for Banking and Financial Law (AEDBF / ESBFL Europe) and the Association Européenne pour le Droit Bancaire et Financier (AEDBF France) hosted their annual conference at the Institut de droit comparé in Paris on 27 June 2025. The event brought together experts, academics and practitioners to discuss the crucial need to reform the European regulatory process in the financial services sector, with a focus on the “Less is More” report published on 10 February by a group of European expert associations, including the AEDBF itself.
Our Name Partner Claudio Bonora took part in this important event, as Vice President of AEDBF Italia and Honorary President and member of the European Scientific Committee of the Association.
The overall aim of the conference was to analyse the complexity and “normative inflation” that characterise the current European financial legal framework, a phenomenon that recent reports, such as those by Letta and Draghi, have highlighted as an obstacle to the competitiveness of financial markets and the European economy in general.
It is not only the content of the rules that is complex, but also the process of creating the rules itself, and the two aspects are closely linked.
The growing role of the European Supervisory Authorities was discussed, as was how Level 1 acts (directives and regulations) are increasingly numerous and detailed, conferring an increasing number of mandates to the European Commission and the European Supervisory Authorities (ESA).
Attention then shifted to how to simplify the regulatory framework without deregulating or increasing its complexity.
The “Less is More” report highlights how the multi-level regulatory process (Level 1, 2 and 3) has reached a saturation point.
The final part of the conference focused on the accountability of the European Commission and EU agencies for their regulatory activities, and the issue of judicial review of EU “soft law”.
The report “Less is More” has formed the core of the conference discussions.
The importance of was re-emphasized unify European financial standards and supervision to promote the development, competitiveness and stability of economies. Despite the progress made by the ESAs, the fundamental objectives have not been fully achieved, in particular due to the excessive abundance of texts and their restrictive effects.
The report identifies the following Key observations and issues:
- Regulatory inflation and the shift in regulatory power: there is a continued inflation of Level 1 European regulation, coupled with a proliferation of Level 2 (delegated and implementing acts) and Level 3 (soft law such as guidelines, guidance, Q&As) texts. One example cited is the 1,000-page “banking package” of 2024, which granted 139 mandates to the European Banking Authority (EBA), compared to 62 mandates in the 500-page 2019 package. This proliferation of mandates, with minimal oversight, has led to a de facto shift of regulatory power from the EU co-legislators (Parliament and Council) to the European Commission and, to an even greater extent, to the ESAs. The ESAs, while not having regulatory powers of their own, prepare draft technical standards that the Commission often adopts without amendments, making them, in practice, the real authors of these Level 2 standards. This undermines the institutional balance, the democratic principle and legal certainty.
- Insufficient evaluation and consultation: texts are often adopted without a real preliminary impact assessment and without sufficient dialogue with stakeholders.
- Proliferation of Soft Law: the ESAs, the Single Resolution Board (SRB) and the European Central Bank (ECB) are multiplying their interventions, even without specific mandates, in the form of soft laws (recommendations, opinions, guidelines, Q&As, etc.). Although not binding, these acts often add new obligations and are applied almost systematically by supervisory authorities, with financial institutions being required to follow them.
- Inconsistencies and control difficulties: the different levels of European standards sometimes contradict each other, and Level 3 texts may conflict with national law. Effective scrutiny of these acts by the Commission, Parliament and Council, and by courts, is difficult. For example, the parliamentary ECON committee was asked to scrutinise 193 delegated acts between 2019 and 2023, a large number to manage in practice.
- Consequences on competitiveness and legal certainty: this situation generates legal uncertainty, constraints and high costs for operators in the sector, undermining the institutional balance, the democratic principle and the competitiveness of the European Union.
The report does not propose deregulation, but rather a “toolbox” of solutions to simplify and improve the standards production framework, better distinguish regulation and supervision, and strengthen control over Level 2 and 3 acts. The proposed solutions are structured on four main axes:
- Stabilize and simplify the regulatory framework: this includes assessing and simplifying the existing framework, limiting instability-generating review clauses, improving impact assessment (with attention to competitiveness), and limiting the number and scope of delegations and mandates.
- Strengthening consultation and transparency: it is proposed to systematically conduct public consultations before the adoption of technical standards and guidelines, ensuring their effectiveness (e.g. adequate response times), publishing the composition of expert committees and facilitating access to the amendments proposed by the Commission.
- Review the ESA Founding Regulations: provides for the diversification of the governance of ESAs, greater consideration of the competitiveness of the European financial sector, and the limitation of the right to adopt recommendations and guidelines only if based on a Level 1 mandate. It also aims to clarify the “comply or explain” mechanism, specifying that financial institutions should strive to comply with the guidelines only if the National Competent Authority (NCA) has declared its compliance, or if they achieve the objectives of the Level 1 act with other equivalent practices.
- Strengthen control of Level 2 and 3 acts: this axis includes strengthening political control (e.g. Commission's right of amendment, partial objection possibility of the Parliament/Council) and judicial control, in particular by facilitating access to pre-litigation remedies (by expanding the role of the ESA Appeal Board and strengthening the independence of the ECB's Administrative Review Board) and ensuring rigorous scrutiny by the Court of Justice of the EU.
The “Less is More” report and the conference discussions are part of a broader context of reflections at European level, which also see the Letta and Draghi reports and the objectives of the new Commission underline the need for a comprehensive assessment and simplification of the existing regulatory framework for the future. The aim is to improve the regulatory framework at the service of European projects and EU competitiveness.
Content by the Lawyer. Claudio Bonora
