BaFin President Mark Branson has made a passionate plea in favour of reducing bureaucracy. For once, he is likely to find the banks receptive to his message. Less complexity, sorting out rules that have not proved their worth, and the same requirements for all market participants in Europe, are what he wants.

Some regulatory projects are so complex that they are seen as truly dysfunctional, and Branson cited EU regulation of sustainable financial products as an example. The rules were intended to stimulate demand, but the implementation was so complex that this effect was not achieved. With regard to the Markets in Crypto Assets (MiCA) Regulation he acknowledged its necessity, but also asked whether we "really need 52 different pieces of legislation to transpose the EU regulation into national law?“

How right he is. Europe could be so simple if only the member states were prepared to give up some of their national areas of responsibility. This is an idea as old as the idea of EU unity itself. And ultimately, national authorities such as BaFin would be largely superfluous.

How this fits in with proportionality, which Branson also emphasises the need for, remains a secret. The minimal level of compromise recently reached on a European Deposit Insurance Scheme (EDIS) has provoked a huge outcry from two of the three pillars of the German banking industry. Savings banks and credit cooperatives understandably fear that their protection systems will fall victim to harmonisation, in the medium term.

Branson's vision of a centralised authority in some new areas, that only sets out the framework, and refrains from bureaucratic spelling out of the details, is also unconvincing. This may somehow work for BaFin at national level, but it paves the way for arbitrariness.

The way the European Union is currently set up, no centralised institution should be given such a sharp weapon. The path of the federation of sovereign states towards a uniformly regulated financial market remains a difficult one, and unfortunately Branson's pithy messages can't do much to change this reality.