The European Parliament’s Committee on Economic and Monetary Affairs (ECON) has recently issued a series of short reports that could hold important implications for the future of EU financial regulation particularly for fintech and digital finance stakeholders.
These reports reflect the Committee’s evolving stance on “regulatory simplification” a term that, in context, signals a broader push toward reducing regulatory burdens and unlocking innovation across the financial sector.
Key Highlights:
Financial Stability & NBFIs
The report on safeguarding and promoting financial stability amid economic uncertainties notably acknowledges the growing significance of the non-bank financial intermediation (NBFI) sector, which now represents approximately 40% of financial sector assets in Europe. This recognition opens space for EDFA to advocate for a balanced approach to NBFI regulation one that supports innovation while ensuring stability.
Artificial Intelligence in Financial Services
The report on the impact of artificial intelligence on the financial sector proposes a more pragmatic approach to AI regulation, aiming to enable the use of AI in areas such as KYC, AML, and credit scoring without triggering “critical infrastructure” status under EU AI rules. This direction may align closely with EDFA’s calls for proportionate and innovation-friendly AI governance.
Together, these developments come at a pivotal moment. As the EU continues its work on completing the Capital Markets Union and strengthening cross-border financial activity, the ECON reports create valuable momentum for fintech stakeholders to contribute to shaping the regulatory agenda.
At the European Digital Finance Association, we see this as an opportunity to prepare responses and propose amendments aligned with our strategic priorities. These topics will also be discussed at the upcoming EDFA Board meeting.
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