This Report examines the systemic complexity of EU financial regulation and develops a structured and conceptually grounded framework for regulatory simplification. Covering banking, capital markets, insurance, and payments law, as well as selected cross-sectoral areas such as AML/CFT, digital finance, data governance, and sustainable finance, it argues that regulatory complexity in the EU has become cumulative and structural rather than incidental. Successive waves of legislation and supervision, driven by financial stability objectives, technological innovation, sustainability goals, and international standard-setting, have produced overlapping legal regimes, fragmented taxonomies, blurred institutional mandates, and an expanding reliance on highly technical and prescriptive rules.

The Report situates the simplification agenda within the broader EU policy context, including the Savings and Investments Union, recent institutional reports, and the European Commission’s simplification initiatives. It explicitly rejects any equation of simplification with deregulation, instead conceptualising simplification as a methodological and architectural exercise aimed at rationalising legal sources, stabilising definitions and taxonomies, and improving coherence across sectors and regulatory levels, with the objective of preserving substantive safeguards while enhancing clarity, accessibility, proportionality and effectiveness. Particular attention is devoted to institutional asymmetries across sectors, the erosion of the Lamfalussy framework, the hardening of soft law, and the interaction between EU and international regulatory standards.

On this basis, the Report advances a coherent set of policy proposals across institutional, substantive, and procedural dimensions. Institutionally, it calls for clearer mandates, legal status, and accountability of EU agencies, alongside a more balanced and coherent approach to supervisory centralisation beyond the banking sector. Substantively, it advocates restoring the hierarchy of regulatory sources envisaged by the Lamfalussy framework, refocusing Level-1 legislation on core principles, disciplining the use of Level-2 acts, and clarifying the legal effects of Level-3 soft law, combined with a systematic review and codification of definitions and taxonomies and a reduction of options and discretions where full harmonisation is feasible. Procedurally, it proposes a structured mapping of applicable rules across sectors and regulatory levels to identify overlaps and inconsistencies, complemented by coordinated reforms, regular evidence-based review cycles, and streamlined reporting through integrated systems and common data standards. It concludes that simplification is a prerequisite for the long-term effectiveness, legitimacy, and competitiveness of EU financial regulation, rather than an alternative to it.

Read the entire article here: https://ssrn.com/abstract=6152746 or https://dx.doi.org/10.2139/ssrn.6152746.