EU: Cross-Border Banking Guidelines Goal ‘Core’
The EU is cracking down on the ability of banks outside the EU to sell services to the bloc, with an emphasis on “core banks”.
The Financial Times writes that this will hopefully allay industry concerns about wider restrictions.
Vice-President of the EU, Valdis Dombrovskis, said it would be left to the block leaders to determine the rules as the legislation progresses.
He said that hopefully, above all else, one would focus on the legislation that “covers core banking services”.
“The provision of core banking activities requires that there is a branch, i.e. a branch or subsidiary, in a member state. . . it must be said that these requirements were implicitly already de facto in place. “
To further restrict cross-border sales, the Commission also intends to give regulators more powers to allow banks to convert some branches into more supervised subsidiaries, with more rules on what services can be sold by non-EU groups that do not have any a physical branch or subsidiary in the union.
FT writes that the regulations have worried lawyers and lobbyists of the banks because the drafting of the legislative proposals could stop all cross-border sales from non-EU countries into the bloc’s market. This could include investment banking and other market activities with separate rules.
The Brussels proposals aim to strengthen a general EU requirement that banks from other countries should have a branch or legal entity in a member state where they want to do business, according to FT.
EU Finance Commissioner Mairead McGuinness said in November that there needs to be a new EU payments strategy over the next few years, starting in the first half of 2022.
See also: Europe needs new rules in order to be the world leader in payments, says EU Commissioner
McGuinness said that more competition is not a bad thing, but the lines between market participants are “blurring” and that more competition would require safeguards against risk and level playing field.
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