Brussels proposes the end of X-Border sales of banks
Brussels has proposed to end almost all cross-border sales of services by banks based outside the European Union, according to a Financial Times report on Monday 22 November, a move that could hurt lenders in London and others. financial institutions without staff and a solid presence in the region.
The decision to close the borders will streamline the functioning of global banks in the European Union. Brussels is also trying to give regulators more power to turn some of their branches into subsidiaries with more oversight, reports FT.
The European Commission’s capital requirements platform works to end the discrepancies between what is allowed in different countries of the Union. The European Parliament and Council have yet to approve the changes.
European Central Bank officials are trying to crush the post-Brexit use of national agreements and waivers on cross-border business, a configuration that has been used for some time by banks based in the United States, Switzerland and Switzerland. Asia for some of their activities in the Union.
The Brussels proposal limits cross-border activity from non-EU countries to ‘reverse solicitation’, where a customer goes to a bank without any marketing. The plan would also “strengthen a general requirement under existing EU rules” requiring non-European banks to have a branch or legal entity in the country where they plan to operate.
Luxembourg generally only requires a license if the service provider is located in the country, while Ireland allows most cross-border activity, except where retail clients are involved.
Related: Banks ask EU to continue accessing UK clearing houses
Meanwhile, Brussels’ failure to extend a license granting EU banks access to UK clearing houses after mid-2022 could cause a “major” disruption in the market.
Banks in the United States and Europe, as well as asset managers, are pushing for the extension of the license and pressure groups have asked the European Commission for more time to allow the market to shift its activities out. from the United Kingdom.