top of page

1. European financial policy: context and objectives

The European Union is undergoing a period of major reform in the financial sector, with the aim of combining stability, competitiveness, sustainability and innovation.

​

Between 2024 and 2026, significant changes have taken place: the entry into force of the new EU economic governance framework, the application of new banking prudential rules linked to the final implementation of Basel III, the launch of the European framework for crypto-assets through the MiCA Regulation, the application of the DORA Regulation on digital operational resilience in the financial sector, the strengthening of anti-money laundering rules with the new European Anti-Money Laundering Authority, and the further development of initiatives on sustainable finance and the Capital Markets Union.

​

This evolution responds to three strategic priorities:

  • Financial stability, to strengthen banks, markets and common rules and prevent systemic risks.

  • Sustainability, to integrate environmental, social and governance factors into economic and financial decision-making.

  • Digital innovation, to provide a clear regulatory framework for new tools and services, including crypto-assets, DLT technologies, digital payments and ICT risks.

  • Key Updates and Milestones:

    The main developments and milestones between 2024 and 2026 include:

    ​

    • April 2024: the new EU economic governance framework enters into force, reforming the rules of the Stability and Growth Pact and introducing medium-term fiscal-structural plans as a central tool for fiscal planning and surveillance.

    • June and December 2024: the MiCA Regulation on crypto-assets starts to apply progressively.

    • January 2025: the new rules of the CRR III/CRD VI banking package start to apply, implementing the final elements of the Basel III standards into EU law and strengthening the prudential framework for credit institutions.

    • January 2025: the DORA Regulation on digital operational resilience in the financial sector becomes applicable, introducing common requirements for ICT risk management, incident reporting, resilience testing and the oversight of critical third-party technology providers.

    • 2025–2026: the implementation of the new EU anti-money laundering package continues. The new European Anti-Money Laundering Authority, AMLA, progressively starts its activities, with further responsibilities becoming operational from 1 January 2026.

    • April 2026: the deadline expires for the transposition of AIFMD II, which updates the rules applicable to alternative investment fund managers.

    • 2026: the revision of the EU framework for payment services moves forward through the PSD3/PSR package, aimed at updating the rules on digital payments, strengthening user protection, tackling fraud and improving the functioning of open banking.

    • Overall, these reforms aim to make the European financial system more resilient, integrated and competitive, while supporting the digital and green transitions of the European economy.

    ​

    For more information: link

2. Fiscal framework and new budgetary rules

The reform of the Stability and Growth Pact, entered into force on 30 April 2024, introduces a more medium-term approach based on national fiscal-structural plans. Through these plans, Member States define a multiannual path for net expenditure, together with the reforms and investments needed to ensure the sustainability of public finances.

​

The reference objectives remain the traditional ones, keeping the public deficit below 3% of GDP and public debt close to 60% of GDP. However, the new framework pays greater attention to the specific situation of each country, debt sustainability and the need to preserve investments and reforms.

  • The new Medium-Term Fiscal-Structural Plans are at the heart of the reformed EU economic governance framework. They strengthen multiannual budgetary planning, national ownership of fiscal strategies and coordination with the European Semester, helping to make the adjustment path of public finances more transparent and predictable.

    ​

    For more information: link

3. Basel III and Prudential Requirements

The Basel III package (via CRR III Regulation and CRD VI Directive, published on 19 June 2024) aims to strengthen the solidity of the European banking system, reducing the probability of systemic crises and harmonising rules between Member States. Supervision and competition conditions are standardised, with particular attention to the management of emerging risks, including ESG (environmental, social, and governance) risks.

​

Main Objectives

  • Strengthening the resilience of the banking sector and greater financial stability.

  • Reduction of variability in capital requirements between banks and EU countries, improving comparability and transparency.

  • Progressive integration of ESG risks into the prudential framework, with EBA guidelines and revision of risk models.

  • Strengthening of powers and harmonisation in supervision, including the regulation of branches of non-EU banks.

  • The main novelties

    • Output Floor: Introduction of a minimum constraint on capital calculated with internal models, at least 72.5% of that required by the standardised method. It will be applied progressively: starting from 50% in 2025 and reaching 72.5% in 2030, to reduce unjustified variability between banking institutions.

    • Operational Risk: New standardised method that more sensitively accounts for historical losses incurred by banks.

    • ESG Risks: Progressive integration of environmental, social, and governance factors, both as credit risks and as information obligations, within the prudential framework. The EBA will provide dedicated technical standards and guidelines.

    • Market Risk (FRTB) and CVA: The new framework for market risks will be operational from 2026, with updates also to credit valuation adjustment (CVA) risk requirements.

    • Supervision of branches of non-EU banks: Strengthening of the regulation for branches of third-country banks operating in the EU, to ensure a level playing field and transparency.

    • Proportionality: Smaller and local banks request and obtain various forms of simplification (calibration of requirements), to avoid excessive burdens relative to their operational size.

    • New requirements on crypto-assets and shadow banking: Provisions introduced to complete the prudential framework, also for emerging phenomena.

     

    Implementation Timeline

    • 9 July 2024: Formal entry into force of the CRR III / CRD VI texts.

    • 1 January 2025: General application of the new CRR III rules (some provisions already apply from July 2024).

    • 1 January 2026: Start of the new framework for market risks (FRTB) and the CVA component.

    • 10 January 2026: Deadline for the national transposition of the CRD VI Directive by Member States, with some specific exceptions.

    • 11 January 2027: Full application of the rules for branches of third-country banks.

     

    For Italy, the challenge is to reconcile the strengthening of stability with the need not to excessively constrain the capacity to provide credit to households and SMEs, monitoring the effects of the new rules on growth and the national productive system.

    ​

    For more information click here

    ​

    Other links:

4. Digitalisation of Finance (MiCA, DORA, DLT, PSD3)

Digitalisation is now an integral part of European finance. The EU has adopted a regulatory package governing crypto-assets, digital resilience, and payment services, with the aim of fostering innovation and trust.

​

  • MiCA (Markets in Crypto-Assets): Rules for crypto-assets and stablecoins.

  • DORA (Digital Operational Resilience Act): In force from January 2025, imposes requirements for ICT risk management.

  • DLT Pilot Regime: Experimentation for market infrastructures based on blockchain technology.

  • PSD3 (Payment Services Directive 3): The proposal will strengthen European open banking.

    • MiCA (Markets in Crypto-Assets Regulation)

      • Defines a uniform legal framework for crypto assets, stablecoins, and crypto service providers.

      • Introduces authorisation, governance, and transparency requirements for issuers.

      • Strengthens investor protection and financial stability, reducing the risks of fraud and speculation.

      • Application was gradual between June and December 2024, as planned.

      • Link to the Regulation

    ​

    • DORA (Digital Operational Resilience Act)

      • In force from 17 January 2025.

      • Establishes a single legal framework for the management of ICT risks in the financial sector, which includes banks, insurers, fintechs, and other financial operators.

      • Includes obligations for ICT risk management, resilience testing (including penetration tests), mandatory notification of significant incidents, and regulation of critical third-party providers such as cloud and data centres.

      • Key objective: Ensure the operational continuity of the European financial system even in the face of serious incidents or cyber-attacks.

      • The regulation involves over 20 categories of financial entities and provides for sanctions for non-compliance.

      • Detailed technical standards (RTS and ITS) are foreseen, entering into force progressively in 2024-2025 with the support of the European Commission and Supervisory Authorities (EBA, ESMA, EIOPA).

      • Link to the Regulation

    ​

    • DLT Pilot Regime

      • Experimental regulation for the use of blockchain technology in market infrastructures (e.g., trading and settlement of securities).

      • In force until 2026, with the possibility of extension or transformation into a permanent regime.

      • Aims to test new solutions without compromising market stability.

      • Link

    ​

    • PSD3 (Payment Services Directive 3)

      • Will update and expand the regulatory framework for payment services, focusing on open banking, interoperability, security, and consumer rights.

      • The objective is to stimulate innovation in digital financial services, increase competition, and improve transparency, with impacts on banks, fintechs, and SMEs.

    ​

    Implications for banks, fintechs, and SMEs

    • Opportunities for innovation and new business models.

    • Need to adapt to more stringent compliance requirements.

    • Potential increase in competition and transparency in digital financial services.

5. Alternative Investment Funds (AIFMD II)

The  AIFMD II  directive, which entered into force in March 2024, represents a significant update to the European regulatory framework for alternative investment funds (hedge funds, private equity, real estate funds, credit funds, etc.).


The objective is to strengthen investor protection, improve risk management, and promote more harmonised supervision at the European level.

  • The main novelties introduced by the directive include:

    • Liquidity Risk Management

      • Strengthened stress testing obligations and plans for managing liquidity crises.

      • Specific supervision for funds investing in illiquid assets (e.g., real estate, infrastructure).

    • Loan-originating funds

      • New rules for funds that grant loans directly to companies.

      • Limits on the level of leverage.

      • Requirements to ensure that loans are granted prudently and do not destabilise markets.

    • Depositaries and Sub-depositaries

      • Strengthened role of depositaries, with greater clarity on responsibilities.

      • Opening, under certain conditions, to the possibility of appointing depositaries in Member States other than that of the manager (cross-border depository regime).

    • Transparency and Reporting

      • More detailed information on investments, risks, and costs, for the benefit of institutional investors.

      • Stricter notification obligations towards national authorities and ESMA.

    • Cross-border Cooperation

      • Strengthening of cross-border supervision and coordination between Member States.

      • Objective: Reduce regulatory arbitrage and increase the coherence of the European fund market.

     

    Timeline

    • March 2024: Entry into force of the directive.

    • April 2026: Deadline for transposition by Member States.

     

    Implications

    • For managers: Increased compliance obligations, particularly for those managing credit funds.

    • For investors: Greater guarantees of transparency and protection.

    • For markets: A more harmonised and stable framework, favouring European integration.

6. Anti-Money Laundering and the European Authority AMLA

The European anti-money laundering package, composed of the sixth anti-money laundering directive (AMLD VI) and the AML regulation (AMLR), establishes a single, harmonised framework for the prevention of money laundering and terrorist financing, aiming to fill the gaps of the previous fragmented national system.

​

The Anti-Money Laundering Authority (AMLA) is a new decentralised agency of the European Union, headquartered in Frankfurt, operational from 1 July 2025.

  • AMLA has the task of directly supervising high-risk cross-border financial operators, with powers of immediate intervention in case of acute danger.


    It coordinates and harmonises the implementation of AML/CFT rules among the competent national authorities, facilitating cooperation and information exchange.


    AMLA works in synergy with the Financial Intelligence Units (FIUs) of the Member States to enhance joint analysis and the management of money laundering and terrorist financing cases.

Main novelties and key points of the AML package

  • Introduction of a Single Rulebook that replaces divergent national regulations with uniform rules directly applicable across the EU.

  • Strengthening of transparency obligations, access to centralised registers (e.g., bank accounts, beneficial owners), and cooperation between authorities.

  • The extension of the scope of AML/CFT obligations includes new sectors and categories of operators (for example, football professionals).

  • Introduction of limits and greater obligations for cash operations and crypto-asset transfers, with identification obligations above certain thresholds (e.g., crypto transactions ≥ €1000).

  • The deadline for the full implementation of the national directives and regulations is set for 10 July 2027, with some derogations for specific areas such as real estate registers (by 2029).


    AMLA will progressively expand its direct supervision activity, starting with around 40 high-risk institutions from 2028, while currently it mainly exercises coordination and harmonisation functions.


    The AML package and the creation of AMLA represent a qualitative leap towards a single, more effective and less fragmented European system, with significant impacts for financial operators, non-financial entities, and supervisory authorities.

    ​

    For more information click here.

7. Savings and Investments Union and regulatory simplification

The Savings and Investments Union (SIU), presented by the European Commission on 19 March 2025, represents the evolution and relaunch of the Capital Markets Union project, launched in 2015. Its objective is to create a more integrated European capital market, capable of channelling private savings towards productive investment, innovation, the green and digital transitions, and industrial competitiveness.

​

The priorities include access to capital for businesses and SMEs, the participation of retail savers in financial markets, the reduction of regulatory fragmentation and the strengthening of European supervision.

  • The main strands of EU action are:

     

    • Mobilising private savings towards productive investment. The SIU aims to better connect European citizens’ savings with the financing of the real economy. Planned initiatives include tools to encourage retail investors’ participation in capital markets, including through simpler and more accessible savings and investment accounts. The objective is to reduce the share of savings held in low-yield bank deposits and channel more resources towards businesses, infrastructure, innovation and the green and digital transitions.

    • Access to capital for SMEs, scale-ups and innovative businesses. The SIU aims to strengthen sources of financing alternative to bank lending, facilitating access to capital markets for SMEs, innovative companies and growing businesses. These measures are also linked to reforms already launched through the Listing Act, designed to make listing less costly and more attractive for European companies. The Commission also intends to improve the financing of European scale-ups, reducing the risk that innovative businesses seek capital and growth outside the EU.

    • Regulatory simplification and reduction of fragmentation. One of the central objectives of the SIU is to reduce the barriers that still fragment European financial markets along national lines. The Commission has launched initiatives to simplify regulatory obligations, reduce duplication and make the rules applicable to financial operators more coherent. This strand also includes initiatives on securitisation, pension funds, insolvency, taxation and tools to make cross-border investment channels more efficient.

    • Market integration and stronger supervision. Within the SIU framework, in December 2025 the Commission presented a package on market integration and supervision, with the aim of reducing regulatory and supervisory barriers that prevent the emergence of a genuine single market for capital. The package aims to strengthen ESMA’s role in cross-border supervision and to make the application of rules more uniform across Member States. The objective is to overcome the fragmentation of national markets, improve investor confidence and make capital allocation in the EU more efficient.

    • Strategic autonomy and European competitiveness. The SIU is also a tool to strengthen the EU’s strategic autonomy, by reducing dependence on non-EU financial markets and increasing Europe’s capacity to finance its own industrial priorities. Deeper and more integrated capital markets are considered essential to finance competitiveness, defence, innovation, and the energy and digital transitions. In March 2026, the European Council reiterated that a fully integrated SIU is a necessary condition to support European growth and called for the conclusion of negotiations on securitisation, supplementary pensions and the market integration and supervision package.

     

    Timeline

    ​

    • 2015: launch of the Capital Markets Union - CMU.

    • 2020: new European Commission action plan to relaunch the CMU.

    • 19 March 2025: presentation of the European Commission’s strategy on the Savings and Investments Union.

    • 2025: launch of the first initiatives linked to the SIU, including work on savings and investment accounts, securitisation, supervision and market integration.

    • December 2025: presentation of the Commission’s package on market integration and supervision, a central element of the SIU strategy.

    • 2026: continuation of legislative negotiations on securitisation, supplementary pensions, supervision and measures to reduce the fragmentation of capital markets.

    ​

    For more information: link

    ​

    ​

8. Sustainable Finance and ESG Reporting

The European Union is recognised as a global leader in sustainable finance regulation. Through an integrated set of regulatory instruments –  CSRD (Corporate Sustainability Reporting Directive), SFDR  (Sustainable Finance Disclosure Regulation) and the EU Green Taxonomy   – the EU directs capital towards sustainable activities, favouring the green and digital transition.

  • The main regulatory directions:

    ​

    Corporate Sustainability Reporting Directive (CSRD)
    Significantly extends sustainability reporting obligations to European companies, involving large companies, listed companies, and progressively until 2028, listed SMEs. The directive requires compliance with the new European Sustainability Reporting Standards (ESRS), with key indicators on emissions, governance, social rights, diversity, and supply chains. In 2025, an Omnibus package of simplifications and extensions is expected, which will lighten the burden for companies, particularly SMEs.

    ​

    Sustainable Finance Disclosure Regulation (SFDR)
    Obliges fund managers and institutional investors to classify products based on their degree of sustainability (Article 6, 8, or 9), increasing their transparency towards end investors. A review is underway to improve its clarity, comparability, and effectiveness against greenwashing.

    ​

    EU Green Taxonomy
    Establishes common criteria to define whether an economic activity is environmentally sustainable, covering key sectors such as energy, construction, transport, and manufacturing. Recent 2025 updates introduce simplifications for reporting, greater proportionality, and the possibility of reporting "partial alignments" for companies in the process of environmental transition.

    ​

    Proportionality and impacts on SMEs
    The Commission has adopted specific measures to simplify ESG reporting obligations for SMEs, reducing costs and complexity while maintaining the ambition of the climate and social objectives.

    ​

    Application Timeline

    • 2024: Start of obligations for large companies already subject to the NFRD.

    • 2025–2027: Progressive extension to other operators.

    • 2028: Full application of the CSRD to listed SMEs.

     

    Implications
    For companies, increased transparency and investments in data collection systems and ESG governance. For investors, more reliable information to direct capital towards sustainable activities. For the European market, consolidation of global leadership in the green economy, supporting the Green Deal and climate neutrality by 2050.

Further insights on the financial dossier and useful links:

bottom of page