FRANKFURT, Germany (AP) – A top banking supervisor says that British banks must put down solid roots if they want European banking licenses to keep access after the UK leaves the European Union.
Sabine Lautenschlaeger said Monday that banks seeking licenses in the EU post-Brexit would need “sufficient local staff and operational independence.” European licensing authorities “will not accept empty shell companies,” she said.
Banks currently can do business throughout the 28 EU countries by having a base in one of those states, an arrangement called “passporting.” Banks that have their EU base in London – which includes British banks but also non-European ones – could lose access to the other 27 EU countries if Britain opts to break away from the bloc’s single market.
EU financial centers such as Frankfurt, Dublin and Paris are competing for any banking business that might have to move.
British Prime Minister Theresa May has said she plans to submit official notice on Wednesday that her country intends to leave the European Union and its provisions for tariff-free trade and free movement of workers within its borders. That follows a referendum last June in which a majority voted to leave. The terms of Britain’s departure will be the focus of talks during a two-year negotiating period following the handing over of May’s letter to EU officials.