The regulation since the 2008 financial crisis has significantly increased financial stability in Europe. This stability is an essential prerequisite for economic development. At the same time, the Basel-III finalisation, "Basel IV" and other initiatives make financing more difficult. This especially affects SME financing and the financing of small companies, as lending becomes more expensive for credit institutions, thereby increasing interest costs for commercial customers. Financing certain activities, such as start-ups, also becomes increasingly difficult under these conditions, pushing some financing towards less regulated shadow banks. This evolution should be adjusted to better suit the needs of the industrial economy. The impact of regulatory requirements on corporate financing should be continuously evaluated and, during economic downturns, adapted countercyclically. Adjustments should also consider necessary investments and the financing scopes of companies. To improve financing conditions for SMEs, guarantee banks, as subsidiary self-help organisations of the economy, should be further developed and strengthened. Development banks, which increase planning certainty for businesses and limit bureaucratic effort, also play a key role in corporate financing.

The extent of financial market regulation should better reflect the complexity and risks of business activities (known as the "proportionality principle"). Regional banks do not require the same complex regulations as internationally operating institutions. Overly complex regulations risk the long-term provision of investments and working capital, particularly for small and medium-sized businesses. Thus, financial market oversight should more strongly consider the size and orientation of institutions. Similarly, rules for disclosing financial and non-financial metrics for real-economy businesses should account for company size and relevance, focusing strictly on risk-related aspects.

A Europe-wide 'Savings and Investment Union', making bank and capital market financing easier to access, could support businesses in Germany. A capital market union could especially strengthen financial support for start-ups, business successions, and restructuring. Beyond this, compared to credit financing, the capital market has the capacity to handle higher volumes for funding digital transformation and decarbonisation. Macroeconomically, the capital market not only offers opportunities for diversification and thus risk spreading but also allows private investors to participate in value developments. In addition to established businesses, young companies in Germany could benefit from the capital market through venture financing.

Challenges primarily lie in establishing simple, uniform, and standardised rules. Such rules should increase attractiveness for investors while being cost-efficient for businesses to implement. Subsidiarity should be observed: harmonise only where it leads to an improvement. For instance, supervision should only be harmonised for actors operating across Europe and subject to EU-wide rules. Further centralisation of capital market oversight, such as creating a European Super Authority for the Capital Market (an expansion of the European Securities and Markets Authority - ESMA, based in Paris), is deemed unnecessary and counterproductive. Competitiveness wouldn't be enhanced as tax regulations remain national, EU directives are implemented nationally, and market structures remain influenced by local nuances.

A European deposit insurance scheme should avoid misaligned incentives. Unified, established, and monitored standards in banking supervision are prerequisites. Centralisations in areas like market infrastructure shouldn't displace private solutions. Voluntary options regarding European standards, such as in accounting, can provide companies with additional flexibility.

Encouraging capital market-based corporate financing shouldn't weaken predominantly bank-based SME financing. Considering diverse interests among market participants, distinct solutions catering to capital market use while limiting effects on non-capital-market-oriented enterprises should be sought. For instance, a meaningful expansion of securitisations, contributing positively to corporate financing through banks and leasing companies, shouldn't increase disclosure obligations for SMEs in credit relationships in Germany.

The increase in regulation has led to a surge in administrative demands for companies. These include expanding requirements in banking regulations and consulting bureaucracy. Costs for tax or sanction-related checks and new demands from Sustainable Finance regulations further add to the burden.

The rise in regulation has brought about heightened administrative demands. This encompasses not only increasingly complex banking regulation but also bureaucracy in consulting. Expenses due to tax or sanction examination processes have further escalated. Add to this the sweeping regulations within Sustainable Finance, which have significantly amplified efforts (see "Sustainable Finance").

Certain proposals within the Capital Markets Union, intending to unify and disclose data across Europe for potential investors, could bring about additional costs, both initial and ongoing, adding strain. These barriers in financing must be dismantled by precisely targeting regulations to affected enterprises and pursuing technological simplifications. The EU Commission’s “Small Banking Box” approach moves in the right direction here.

Conversely, the use of delegated acts, granting supervisory bodies increasing significance, should be re-evaluated. Establishing transparent, fundamental legislative processes under the EU Commission and European Parliament ensures companies gain clearer comprehension of their investment financing pathways.

The new and diverse capabilities of digital financial services can create new opportunities for businesses. In particular, distributed ledger technology – also known as blockchain – and other innovative technologies offer many possibilities, but have struggled to find wide adoption. The European Central Bank, in collaboration with the private sector, should use the introduction of a digital euro to drive innovation and new business models with this technology. Initially, it should focus on the wholesale version and the B2B version, leveraging the technical opportunities and strengthening Europe's position in international competition, rather than introducing the retail version, which could potentially limit the intermediation capabilities of commercial banks.