The European Union has urged national bank regulators to make sure they don’t clamp down too hard on cross-border banks by imposing capital controls or other international transfer limits, according to a statement today.
Countries should report to the Brussels-based commission by the end of this month on how they supervise cross-border banks, according to a statement issued by the office of Financial Services Commissioner Michel Barnier. Review of that information will determine next steps, the statement said.
“The Commission took this action because it had been made aware that, on several occasions, national bank supervisors acted independently to impose allegedly disproportionate prudential measures on national banking subsidiaries of cross- border EU banking groups,” the statement said.
“The alleged measures in question include capital controls, restrictions on intra-group transfers and lending, limiting activities of branches or prohibiting expatriation of profits,” the statement said. “These would have the effect of ‘ring-fencing’ assets, which could, in practice, restrict cross- border transfers of banks’ capital and potentially constrain the free flow of capital throughout the EU.”
To contact the reporter on this story: Rebecca Christie in Brussels at firstname.lastname@example.org
To contact the editor responsible for this story: Peter Chapman at email@example.com