The world is becoming increasingly “complicated,” said , chairman of the Luxembourg Bankers’ Association during the ABBL’s annual press conference on 30 April, and boosting Europe’s competitiveness is a key priority in the face of global challenges.

“I think there’s a consensus at the European level that Europe must simplify to stay in the race,” said , secretary-general of the ABBL. , published in September 2024, the “mission letter” given to the EU commissioner for financial services and the savings and investments union Maria Luís Albuquerque in September, and the ” published in January 2025, illustrate this necessity and provide blueprints for how Europe can become more competitive.

Regulatory simplification--not deregulation--will play an important role. The ABBL on 29 April issued a document that includes some forty proposals for moving towards a more efficient and innovation-friendly regulatory environment for the European financial sector, explained Seillès, who highlighted five of them.

Levers for smarter regulation

“The observation we make is that currently, in Europe, we may have some room for improvement in terms of the coordination of public policies,” he said. “We expect a lot from the banking sector, as the guardian of the integrity of financial systems, to fight against financial crime, to ensure that investments are directed towards what is sustainable, what is digital--the investments of tomorrow--to be able to absorb financial shocks. And that has resulted--for around the last 15 years--in several layers of regulation that, in our view, are starting to contradict each other.” Simplification, therefore, is key.

“The second thing, which is a linked to the multiplication of regulations, is proportionality,” Seillès continued. “The more you face a regulation that is of significance, the less space you have to focus on the most material risks. We think there must be a refocussing of the regulation towards the most essential risks and issues.”

Point three concerns data and reporting efficiencies. “When you’re a bank, you’re faced with multiple requests from the authorities when it comes to data. That implies looking for the data, requesting it from your clients--which can occasionally be a source of frustration,” he said. “Sometimes, you find yourself declaring the same information to different recipients, whether that be the tax administration, the CSSF [Financial Sector Supervisory Commission] or the European Central Bank.” There needs to be a “rationalisation” when it comes to data reporting.

Fourth, support for innovation is very important. “There’s a direct link with European competitiveness. The authorities and regulation are there to ensure financial stability, but investor protection must also be kept in mind. The roadmap produced by the Financial Conduct Authority--the UK equivalent of the CSSF--is a very good model.” The FCA’s Innovation Pathways Services include, for instance, support for understanding regulation, meetings with subject matter experts and more for applications related to AI, quantum, financial inclusion, open finance and tokenisation.

Finally, “faced with very complex regulation, public-private collaboration is--more than ever--necessary,” said Seillès. The dialogue already exists and is “very important for understanding the impact of regulation.”

Concrete initiatives: bank accounts and Retail Investment Strategy

Opening bank accounts in Luxembourg is a challenge often cited by companies who want to set up in the grand duchy, noted Seillès. But it’s not just an issue here in Luxembourg, he pointed out. It’s seen in other EU countries and is partly linked to know-your-customer regulations. To tackle this issue, the ABBL has opened a “dialogue” with the CSSF to clarify know-your-customer requirements.

Other factors that contribute to the challenge of opening bank accounts is the complexity of certain business models and a lack of awareness amongst market players of the banking services available in Luxembourg. The ABBL, said Seillès, has developed a list of roughly 25 banking and payment institutions who have declared themselves “interested in opening bank accounts for certain types of companies.”

The banking association has also developed practical guides, reinforced training initiatives for compliance officers (together with the House of Training and the Association of the Luxembourg Fund Industry) and is working on developing dedicated sessions with the CSSF.

The EU’s Retail Investment Strategy and its goal of “mobilising dormant retail savings” to finance the sustainable transition, European companies and other priorities is a “commendable idea,” said Seillès. But because of its “complexity” and “contradictions,” he continued, “we have our reservations about the results it might lead to.”

“We think that the response lies rather in a better investor awareness than overprotection.” More education is necessary and increased flexibility is needed, for instance, in the advice that banks can give investors. Otherwise, we run the risk of reinforcing barriers between companies that need investment and people who wish to invest. “That’s a path on which the European Commission must work,” Seillès concluded. “It must simplify the existing legislative proposals.”