Invest Europe

Position on the prudential treatment of banks' long-term equity fund investments

Positions & consultation responses

23 Sep 2026

In a position paper and in a joint paper by the European Banking Federation (EBF), we argue that Europe cannot close its investment and competitiveness gaps without mobilising all available sources of capital, including banks. It highlights how the current prudential framework discourages banks from investing in diversified venture capital, growth capital and private equity funds, despite their lower risk profile compared with direct company investments. The two papers call for a targeted revision of the CRR, including a more risk-sensitive treatment of diversified long-term equity funds, in order to unlock additional financing for innovation, technology, defence and industrial transformation while maintaining prudential soundness.