Brexit: The European Central Bank is stepping up its control of transfers from London

The European Central Bank (ECB) is stepping up its efforts to ensure that international banks wanting to do business in the Eurozone after Brexit do not use blank typos.

According to sources familiar with the matter, information from Bloomberg confirms that the foundation is entering the second phase of the censorship process that specifically targets Wall Street giants such as JP Morgan, Goldman Sachs or Citigroup.

The list of transfers

As part of Brexit, British or international banks operating from London lost the European passport that allowed them to serve all of their European clients from the United Kingdom. They should now have a bank license and install their own Eurozone resources.

But some are slowing and hesitating to manage their emergence to the city, especially in the current context of the health crisis.

“Most banks have realized that empty shell institutions are unacceptable in the eurozone, and that they must allocate stocks, liquidity and management with effective responsibility to direct European affairs, quality and an adequate amount of resources in charge of risk management,” Andrea Enria, chief European superintendent (SSM), warned in February. .

maps drawing

But at the end of the first phase of the “mapping” work, which began at the end of 2020, the European banking policeman noted that many international banks were still far from implementing the “targeted operating model” they had committed to. In the context of Brexit. This provides accurate transfers of teams, but also of assets or capital, from London to the Eurozone.

The second stage of this exercise is now challenging. European Central Bank inspectors will concretely verify transactions recorded in London or in the eurozone. They will focus in particular on the extent of the so-called controversial “back-to-back” practice that allows the bank to serve clients in Europe while preserving capital and management in the United Kingdom.

See also  Google wins a legal battle against Oracle

As part of a confidential dialogue, the European Central Bank intends to present its first results to relevant institutions in July to finish the review in the fall. This may lead to official orders.

The corporation does not want to take on the face of what the banks say to it. Rather, it wants to see concrete facts and measures, according to close sources.

Leave a Reply

Your email address will not be published. Required fields are marked *