The German chancellor Olaf Scholz has described the completion of a European banking union as a ‘priority’.

Scholz, speaking at a Berlin conference on Tuesday, said that the union would help to create uniformity in financial markets across Europe and enable banks to move their capital freely across the EU – an issue often cited by lenders in the region.

He said: “We need better framework conditions for cross-border banks. They must have full flexibility to deploy their capital and liquidity.”

The banking union project was envisioned after the 2008 financial crisis in an attempt to centralise supervision of big lenders under the European Central Bank.

The region’s lenders including Deutsche Bank AG often cite the difficulty to move their funds from one EU country to the next as an important impediment to cross-border consolidation. They say that lifting the restrictions would allow them to shift their financial resources to where they earn the most money and thus provide a strong incentive to expand in other countries.

While there is wide support for a banking union, one of the aspects of the plan, a joint deposit plan, has faced opposition from within Germany.

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