Speech by Commissioner Albuquerque (by video message) for the 13th Regulatory Conference: The innovative Strength of Germany as a Business and Financial Centre – Opportunities and Challenges for the Financial Industry and Supervision, Deutsche Bundesbank University of Applied Science

Good morning, ladies and gentlemen.

Firstly, I want to thank Joachim and the team organising this event for the opportunity to participate and to provide the views from the European Commission.

Innovation is the central theme of todays event, and fostering innovation is a key objective of this Commission. Whereas you will discuss throughout the day the different dimensions of innovation and their importance for, and impact on, the German marketplace, I would like to set the scene more broadly by focusing on competitiveness.

Fostering innovation is essential for Europes competitiveness, and strengthening the efficiency and integration of EU financial markets remains a central priority of my work.  As Europes largest economy and a key driver for growth, Germanys competitiveness is important for the entire Union.

Recent geopolitical developments confirm again and again that we need a united Europe to be able to play a role on the international arena. Even more so when it comes to economic strength, our futures are deeply interconnected and should be measured as one.

In a global context, even the largest European nations are relatively small compared to the economic and political giants of the world. Therefore, discussing German competitiveness, or of any Member State for that matter, is in fact discussing European competitiveness.

This shines a spotlight on our need for a stronger and more integrated Europe. It reminds us that our strength lies in unity and collaboration.

As a European Commissioner, my attention is fully on the obstacles that slow Europes integration and the consequences this has for our competitiveness. These are complex debates, but the reality is clear: continued fragmentation leaves Europe on the losing side. Too often, the only beneficiaries are our global competitors, while European citizens bear the cost.

Today I will speak about Europes competitiveness, and indeed the importance of the German economy, which is a crucial part of our collective strength.

I will discuss this through the lens of financial services, as this is the core of my work as European Commissioner.

A European and global economic powerhouse, known for its strong industry, export capacity, and sound public finances. This is Germany.

And you play a key role in the EUs financial markets.

One of the defining features of Germanys financial system is its robust and diversified banking sector, structured around the so-called “three pillar system”. Many of you in the room today are representatives of this system, including public sector banks, cooperative banks, and private commercial banks.

Foreign banks also play a big role in Germanys financial system, acting in areas like trade finance, securities business, and investment banking. The strong foreign presence reinforces the trust and stability that Germany offers to its partners.

Regarding asset management, Germany is one of the leading fund domiciles in the EU. It represents a dynamic investment location – one that is attractive to both private and institutional investors.

The dynamism of the economy is also seen through the maturing fintech landscape, which has become one of the most well-funded start-up sectors in the country. In the first half of 2024, FinTech firms raised 687 million euro in investment. This is a 13 percent increase over the second half of 2023, and a 46 percent rise compared to the same period the previous year.

Germany is also a true European leader when it comes to green finance and remains the largest sovereign bond issuer in the euro area.

Elsewhere, mobile payments in the country tripled in recent years, we also saw Germanys venture capital market showing renewed strength in 2025, and financial literacy rates are some of the highest in the EU. These are all signs of a competitive financial sector, primed for continued growth and success.

I also have to mention Frankfurt, which stands out as one of the worlds leading financial centres and key for market stability and integration within the European Union.

Frankfurt benefits from an exceptional concentration of financial institutions and regulatory bodies, with 100 000 professionals employed in financial services and a strong academic pipeline, including one of our hosts today: Hochschule der Deutschen Bundesbank.

Despite Germanys strong finance and professional services sectors, the current global economic and geopolitical landscape is challenging and unpredictable, unfolding in real time.

Europe faces both internal structural barriers and external pressures that limit our potential and slow progress.

To remain competitive on the global stage and safeguard our autonomy as a bloc, we must become more agile, self-reliant, and competitive.

This mission is at the heart of the current European Commissions mandate, and we are determined to act in line with the Competitiveness Compass that President von der Leyen proposed in January.

Through this overarching strategy, we are placing economic revival and strengthening Europes global position at the centre of all our actions and legislation.

Since the beginning of this mandate, my mission has been to bring this competitive effort into the European financial system.  

We must ask ourselves if our financial system, as it has operated in the past, is sufficiently geared towards the needs of the future.

And I would argue that the answer is “not yet”.

The EU capital markets are not where we would like them to be, especially in terms of size and level of integration.

Our equity market, for example, is much smaller than those in the US. And in private equity and venture capital the gap is even bigger. Venture capital is 10 times higher in the US than in the EU. The number of IPOs is also too low to allow for the growth that we want and need.  

Small markets mean less depth and less liquidity, which means less choice, higher costs and lower returns. This has consequences for our citizens and our businesses.

Making sure that our citizens have real opportunities to cater for their financial wealth, including by taking better advantage of financial markets, is a key focus for me. Europeans are known as great savers but often prefer low-risk bank accounts over investing.

By doing so, they miss out on turning savings into productive assets that benefit both their future and the economy.

In Germany, this message is gaining traction, especially among younger people, with significant growth in ETFs providing protection against inflation and interest rate risks.

Investing is also vital for Europes economy, helping us fund our priorities like defence, space, cleantech, AI, biotech, semiconductors, and critical raw materials.

These investments lay the groundwork to support future generations.

Thats why now, I want to speak to you about a strategy I launched earlier this year: the Savings and Investments Union, or the SIU for short. It forms a crucial element of the overall competitiveness strategy of this European Commission.

Our SIU strategy has four pillars, covering citizens and savings, investment and financing, integration and scale, and efficient supervision. Ill take each of these in turn.

The key to bringing more citizens into capital markets is to empower them to participate easily and with confidence. Today, too many people hesitate to invest because of specific barriers, most notably, a lack of investment know-how and a lack of simple, accessible entry points.

As part of the SIU, we are working to dismantle those barriers and ensure that citizens can grow their wealth and create their own financial safety nets.

In a few weeks, we will present a financial literacy strategy to equip citizens with the knowledge and financial information they need to make their money work for them—and to support Europes economy.

We are also looking to bring in more entry points to capital markets, including tax incentivised savings and investment accounts and improved access to pension schemes.

Our recommendations on a blueprint for a savings and investments account for Member States to use will be presented in the coming weeks and will be based on the very best practices from Europe and beyond.

On pensions, we will promote measures such as auto-enrolment and pension tracking systems. This way Europeans can see what they have invested, and what they can expect at retirement.

Through these initiatives, we will create opportunities and incentives for citizens to directly engage in capital markets, and will demystify an industry that has the power to raise living standards across Europe.

The SIU strategy has a goal of making innovation and growth easier and faster across Europe. Our European companies must feel supported and must be enabled to innovate, grow and compete on the world stage.

A key part of this is ensuring businesses have seamless access to diverse, cross-border, financing and investment options. This forms the second pillar of the SIU.

That means unlocking more support from institutional investors through venture capital, private equity, and infrastructure funding. We will adopt a first set of measures in this area in the fourth quarter of this year.

We have also recently taken steps to boost lending capabilities from banks in Europe via securitisation, freeing up capacity for banks to provide more – and cheaper – lending to households and small businesses throughout Europe.

But integration and scale remain major challenges holding back EU capital markets. Much of the fragmentation is linked to our financial markets infrastructure. As a result, our firms are often constrained to search financing only in their local markets without benefiting from the seamless capital flows that we would expect from an internal EU wide market. This puts them at a competitive disadvantage to their international peers.

Our stock exchanges are smaller and less liquid than in other major economies, and too often capital stays within national borders.

Through the SIU, we are advancing proposals designed to overcome the persistent internal barriers and drive meaningful progress.

We recently conducted a public consultation on the barriers preventing a more integrated market, where we received submissions from almost 300 stakeholders.

This feedback has finetuned our understanding of the barriers that market participants are facing and will feed into the ambitious package of legislative proposals which we will publish by the end of this year.

The final pillar of the Savings and Investments Union focuses on how we supervise financial market players in the EU.

Right now, even though the rules are broadly the same across the Union, they are applied differently from one country to another and the cross-border supervisory perspective needed for both efficiency and resilience reasons is often very limited.

This creates friction, making it inefficient, harder and more costly for financial firms to operate across borders.

Our aim is not to create a one-size-fits-all framework. Diversity is important, and our rules have to reflect that.

Through the SIU, we plan to improve the tools that supervisors have to work better together, while also looking to strengthen the supervisory capabilities and responsibilities of EU level supervisors when it comes to the biggest and most critical players. 

We are assessing options for single supervision models, balancing EU interest with local expertise to ensure efficient decision-making.

I want to mention banking as well, as its a crucial element of the SIU. Our European banks are strong and safe, but the European banking sector as a whole is not competitive enough.

Banks remain by far the main providers of finance to EU companies, particularly SMEs, and they are also important enablers of capital markets.

Like our capital markets, the banking sector remains fragmented across borders.

We need to achieve a true single market in banking, to mobilise capital across the EU and foster the international competitiveness of the EU banking sector. Such integration of the banking sector can benefit everyone and can cater for every banking model.

To achieve this, it is important to identify and reduce barriers to market integration and undue administrative burdens.

This is why we will prepare an extensive report next year assessing the overall situation of the banking system in the Single Market, including the evaluation of the banking sectors competitiveness.

This will give us a clear goal and a way to achieve it.

As you can see, there is a lot of work ahead of us to put us on our strategic path to respond decisively to todays geopolitical and economic challenges, with agility and unity.

On the Commissions side, we have committed to publish our flagship proposals by the end of the year and to follow up with the banking report by next year.

We now need to make the different stakeholders - and not least the Member States in the Council – realise that we need action from all sides, at EU level, as well as at national level and from the industry.

If we are successful in this endeavour, these efforts stand to bring real, positive change to every Member State and every citizen across the continent, boosting competitiveness and driving sustainable growth for a stronger, more resilient Europe.

Before I conclude, I want to sincerely thank each of you for your engagement, your ideas, and your commitment to shaping a stronger, more resilient European financial system. Your contributions are invaluable, and I look forward to seeing the progress we can achieve together.

I wish you a productive and inspiring day ahead.