In a recent government meeting, Mario Draghi highlighted significant shortcomings in the European financial system, emphasizing that Europe must enhance its capital markets and competitiveness to match the United States. Draghi's report pointed out that the U.S. capital markets are superior in terms of market size, retail participation, available capital, and overall economic value.

The discussion also touched on the anticipated reproposal of the Basel 3 Endgame, which is expected to introduce substantial changes to operational and credit risk regulations while leaving market risk largely unchanged. Concerns were raised about the potential negative impact of these changes on American economic growth and competitiveness.

Mr. Benson, a key speaker at the meeting, argued that the U.S. economy relies heavily on capital markets for funding, a system that has proven effective, especially during the recovery from the pandemic. He noted that U.S. corporations were able to quickly repair their balance sheets by accessing debt markets, a flexibility that European markets currently lack.

Benson warned that imposing stricter regulations could either increase the costs of capital market activities or lead banks to withdraw from certain areas, which would further strain the U.S. financial system. He underscored the importance of maintaining a robust capital market framework to sustain economic growth and competitiveness, particularly as Europe continues to struggle with its own financial infrastructure.