Why Europe should fear Trump’s deregulatory blitz – not his tariffs

Europe’s banking sector is "riding the wave of deregulation fetish even if profitability has been improving dramatically” as a result of the European Central Bank’s higher interest rates, said Sander Tordoir, chief economist at the Centre for European Reform.

Tordoir added that Europe’s push to slash regulations is a “strange sight to behold” given that Europe, unlike the US and Switzerland, successfully avoided a banking crisis in March 2023, when the collapse of San Francisco-based Silicon Valley Bank sparked widespread market panic that ultimately led to the failure of Credit Suisse and its acquisition by rival UBS.

“The supervision from the ECB and financial regulation put in place after 2008 surely has played a constructive role” in Europe’s avoidance of any spillover effects, Tordoir said. “It was a test and only the eurozone passed it with flying colours.”