The recovery of the European economy cannot be primarily dependent on public assistance or banks. Public measures implemented during the epidemic, such as loan moratoria and guarantees, were important to stabilize businesses, but they cannot be permanent. As the economy recovers from the crisis, Europe requires a diverse financial system that mobilizes private capital alongside public finances, allowing for long-term investment and growth.
A more balanced financial ecosystem for the future
The banking sector across the European Union remains resilient. By the end of 2024, banks reported strong capital positions, solid liquidity, and historically high profitability. Yet resilience alone isn’t enough. The scale of investment needed for innovation, infrastructure, digitalization, and sustainability goes far beyond what banks can supply, and EU capital markets remain comparatively shallow and fragmented.
Launched in early 2025, the Savings and Investments Union (SIU) aims to close this gap by channeling idle household savings from low-yield bank accounts into productive capital-market investments. A more integrated market and a more unified banking landscape would expand access to non-bank financing, especially for small and medium-sized businesses.
My vision is simple: I want European savers to earn a fair return on their savings. And I want European businesses and innovators to have access to the financing they need to drive our economy forward. I want everyone to be able to find the right counterpart, and the right opportunity under the savings and investments union,
Maria Luís Albuquerque, Commissioner for Financial Services and the Savings and Investments Union
New financing instruments beyond traditional lending
The EU’s new securitisation framework is one of the primary measures being reviewed. The mid-2025 proposal streamlines criteria and makes the system more SME-friendly, letting banks and investors pool loans, share risk, and free up balance sheets while directly supporting businesses. Alongside this, reforms to crisis management and deposit insurance for smaller banks aim to strengthen the Banking Union’s safety net and enhance the system’s growth capacity.
Building a competitive, sustainable Europe
Effective implementation might significantly reduce Europe’s funding deficit for critical projects, preserve domestic capital, and actively promote long-term prosperity. Without deeper, more diversified markets, recovery may stagnate, so now is the time to rebuild the financial system for resilience and creativity.
