The Commission is reported to have identified 19 banks from third countries, including Goldman Sachs, the Bank of America and the Bank of China Ltd, that should establish an interim entity, such as a holding company, in the EU in order to facilitate European supervision, Reuters reported on Monday 4 September.
Readers may recall that in November 2016, in the framework of its banking risk reduction package (see EUROPE 11674), the Commission proposed this new requirement, which would apply to major third-country banks with assets of more than €30 billion in at least two EU countries. It echoes a similar measure brought in by the United States targeting European banks established on its territory.
The Commission's working document, to which Reuters refers, stresses that regulators would have limited access to relevant data concerning the operations of the subsidiaries of third-country banks and highlights the fragmented nature of supervision and risks of regulatory arbitration.
According to Reuters, the European Central Bank and the Single Resolution Board are calling for foreign branches to be subject to this requirement, as well as subsidiaries. The Commission is reported not to be in favour of this, arguing that subsidiaries are directly supervised by the countries in which they are established, whilst branches are supervised principally by the country of origin of the bank.
The European provision under consideration will be negotiated at the Council by qualified majority and will apply to the United Kingdom once it has left the European Union. (Original version in French by Marion Fontana)