Makhlouf rejects deregulation to boost European competitiveness
Central Bank of Ireland Governor Gabriel Makhlouf cautioned European policymakers against easing banking rules to foster competitiveness. Speaking at the Eurofi Financial Forum on September 17, 2026, he called for completing the Single Market and the Banking Union instead.
Resilience before deregulation
Makhlouf rejected calls to relax prudential standards, warning against repeating past policy errors.
“Resilience is not a constraint on competitiveness. It is the precondition for it,” Makhlouf said.
He identified market fragmentation, rather than capital levels, as the primary impediment to cross-border finance, noting that cross-border corporate lending accounts for only one-sixth of the euro area total.
Rather than diluting bank buffers, Makhlouf urged authorities to finalize the Banking Union with a European Deposit Insurance Scheme (EDIS).
He also pressed for eliminating structural barriers, including divergent national insolvency regimes, digital infrastructure gaps, and fragmented labor rules.
Ten trillion euros waiting for scale
Europe holds roughly €10 trillion in cash deposits, contrasting with the €750 billion to €800 billion in annual investment needed by 2030, as estimated by Mario Draghi.
Makhlouf noted that European venture capital lags far behind the United States in late-stage funding, driving scaling companies to foreign capital markets.
He argued that capital flows follow returns and real economic activity, making deep integration across goods, services, and capital essential, alongside work on a common safe asset and the Digital Euro.
Sound principles face political deadlock
Makhlouf offers a sharp pushback against banking lobbies seeking deregulation in the name of competitiveness.
However, his key prescriptions—a common safe asset and EDIS—remain politically stalled in national capitals.
Without a political breakthrough on fiscal risk-sharing, this vision of an integrated financial market will stay aspirational.