Cost of Regulation
Published on 31 December 2025
Regulation is essential to safeguard financial stability, market integrity and consumer protection. In recent years, however, the cumulative nature of regulatory requirements has generated increasing costs for banks operating in Luxembourg and across Europe.
While the sector fully embraces its responsibilities, compliance obligations increasingly shape operational choices, resource allocation and investment capacity. Through recurring surveys, policy analysis and dialogue with authorities, the ABBL documents the cost of regulation and translates evidence into proposals aimed at promoting proportionality, coherence and effective regulation.
The ABBL / EY Cost of Regulation Survey 2025
The fourth edition of the ABBL / EY Cost of Regulation Survey provides a comprehensive overview of how regulatory requirements affect banks’ cost structures, staffing and strategic priorities.
Conducted in partnership with EY Luxembourg, the survey has become a key reference for assessing regulatory cost drivers and identifying structural trends over time across different types of institutions operating in Luxembourg.
Key findings
Regulatory costs remain a major cost driver
Regulatory requirements continue to absorb a significant share of banks’ investment and operating resources, confirming compliance as a structural cost factor for the sector.
Disproportionate impact across institutions
While larger institutions incur higher absolute regulatory costs, smaller institutions face a disproportionately higher burden relative to their size. This highlights structural constraints and reinforces the importance of proportionality in regulatory design.
Growing pressure on financial and human resources
Compliance obligations increasingly influence staffing levels and internal organisation, affecting banks’ capacity to allocate resources to innovation and strategic development.
Persistent regulatory priorities
Financial crime prevention and tax transparency remain dominant regulatory priorities, alongside operational resilience, market regulation and payments-related requirements.
Download the full document: