The banking union must be introduced in the EU, according to the German chancellor

We need better framework conditions for cross-border banks… They must be given full flexibility to deploy their capital and liquidity freely within the EU

Scholz said at a conference in Berlin on Tuesday.

Lenders in the region, including Deutsche Bank, often cite that an important obstacle to cross-border consolidation is that it is difficult for them to move their funds from one EU country to another. They say lifting the restrictions would allow them to direct their financial resources to where they make the most money, giving them a strong incentive to expand into other countries.

Scholz’s comments follow a push by the European Banking Association to declare the sector a “strategic sector”. The lobby is led by the CEO of Deutsche Bank, Christian Sewing, who also attended the banking conference.

In his speech, Scholz also said that there is a need for greater harmonization of national insolvency legal systems, more uniform tax standards and common rules for capital market supervision.

We are working intensively with the French government on specific proposals for all these points.

Some EU officials have suggested giving the bloc’s securities watchdog, the European Securities and Markets Authority (ESMA), more powers. According to the idea, a powerful agency modeled on the American Securities and Exchange Commission (SEC) would be created.

Cover image source: Getty Images