• Santander chair Ana Botín warns European bank regulation is stifling innovation and growth

• She argues without growth and profits banks cannot build capital and support the economy

• Botín points to a widening €3.5 trillion capital gap with U.S. banks over three years

• European banks face tougher solvency rules and higher tax burdens compared with U.S. peers

• EIB president says Brussels is not pursuing deregulation, highlighting regulatory tension

• Regulators also signal oversight of digital assets and innovation to safeguard financial stability

Santander chief, Ana Botín, has delivered a pointed critique of Europe’s regulatory regime for banks, declaring that “regulation kills innovation … we need to understand that unless we allow companies to innovate, we are not going to grow”. 

Botín warned the International Banking Conference in Madrid that the regulatory burden imposed on European banks could hamper investment, profits and ultimately the ability of lenders to build capital. 

She said that without growth and earnings, banks cannot strengthen their balance sheets - and that a strong economy in Europe needs strong banks. 

Her remarks come as European governments weigh whether to follow the example of the U.S. under the Trump administration, which has sought to roll back post-crisis rules, and as regulators in Brussels reaffirm that deregulation is not on their agenda. 

At the conference, Botín pointed to a widening gap between U.S. and European banks - estimating the capital support differential could grow by as much as €3.5 trillion over the next three years - thereby limiting European banks’ capacity to lend. 

She underscored that Europe’s banks face both higher tax burdens and tougher solvency requirements than U.S. peers - a dual handicap she argued speaks to a broader structural disadvantage in the global banking landscape. 

Meanwhile, other speakers at the same event reinforced the regulatory tensions. European Investment Bank (EIB) president Nadia Calviño stressed that deregulation is not part of the Brussels agenda. 

Meanwhile, regulators flagged emerging themes: the rising role of digital assets, stablecoins and banking innovation, with calls to ensure that expansion into new forms of finance does not undermine credit flows or system stability.

The clash between growth-driven industry voices and prudence-oriented regulators reflects the deepening debate at the heart of Europe’s economic model: how to promote credit, investment and innovation without sacrificing the soundness of the banking system. 

According to Botín, the current regulatory calculus threatens to tip the balance too far towards caution - and away from growth.