International banks based in London risk losing access to the
EU's single market once Britain leaves it in 2019, forcing many
to consider moving parts of their businesses to the bloc and
seek a license from the ECB, the sector's watchdog.
But Sabine Lautenschlaeger, who represents the ECB's supervisory
arm on the central bank's board, said progress had been slower
"Frankly, the banks are not as far advanced as we would like
them to be," Lautenschlaeger said in a newsletter article.
"Of the banks that have indicated an interest in relocating
operations to the euro area, a number of the larger banks have
made progress in their planning. But we have not seen many final
She added the ECB would not grant licenses to "empty shells" and
would take a tough stance on "back-to-back transactions", where
a bank would conduct trades out of its EU base but process and
risk manage them at its London office.
"While we do not rule out this practice per se, ultimately we
expect banks to manage relevant parts of their risks locally and
independently," Lautenschlaeger said.
Lautenschlaeger also said she expected banks moving to the EU to
update their recovery plans, which kick in if they fail,
"shortly" after moving.
(Reporting By Francesco Canepa; Editing by Angus MacSwan)
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