Finance Finland’s CEO Ahosniemi: The Commission makes grand declarations for better regulation but fails to back them up with concrete measures in its work programme

“For the EU to be able to boost its competitive standing, especially in relation to China and the US, it is important to weed out overlapping and detrimental regulation. Overly complex and poorly prepared regulation threatens private sector and household investment and the green transition”, says Finance Finland’s CEO Arno Ahosniemi.

In its new work programme, the Commission promises to simplify and streamline regulation. Despite this promise, it seems to continuing in the same path as the previous Commission and planning more new regulation. Ahosniemi also wonders why the list of legislative proposals to be withdrawn includes barely any financial sector regulation.

“The Commission is not delivering on its lofty speeches when it comes to substance. Politicians in the EU and in Finland should also have the nerve to revisit regulatory frameworks and carefully consider what is superfluous or overlapping.”

Together with its work programme, the Commission also issued a ‘Simpler and Faster Europe’ communication for simplification measures and more effective implementation. This is very commendable, but the financial sector calls for concrete action. Simplification proposals must be prepared also on financial sector regulation.

The Commission made a good call in withdrawing the directive on adapting non-contractual civil liability rules to artificial intelligence (AI Liability). The project would have touched on the insurance sector and overlapped with the new Product Liability Directive.

FIDA is a good example of bad regulation

A good example of poorly prepared and detrimental regulation is the proposed Financial Data Access Regulation (FIDA), which aims to enable customer data sharing and third-party access in the financial sector. There is no guarantee that more extensive data access would improve services. FIDA is also commonly regarded as an example of how the Commission tends to contradict its own simplification agenda.

“The entire FIDA framework should be taken back to the drawing board or even buried altogether. The framework has faced opposition from both member states and the financial sector due to the unreasonable regulatory burden and complexity it would impose.”

From the financial sector’s point of view, the Commission work programme includes several important measures, such as enhancing the EU’s competitiveness, simplifying regulation and ensuring effective implementation. The Commission also aims to make Europe the world’s first climate-neutral continent by 2050.

Also on the agenda is the promotion of the green and digital transition. Another important, cross-cutting theme in the EU’s political guidelines for the near future is strengthening European security and defence capacity.

“These goals go hand in hand and are important for the financial sector. Now we can only hope that the Commission will keep to its word and put genuine effort into simplifying regulation, which is currently at risk of expanding beyond control”, says Ahosniemi.