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"In
the case of Brexit, we have many banking groups coming in,
probably," ECB executive board member and bank supervisor Sabine
Lautenschlaeger said on Monday.
"To enable banks to comprehensively comply with our
requirements, we will grant bank-specific phase-in periods," she
said, adding that the process could last months or possibly
years, depending on individual circumstances.
Britain will trigger divorce proceedings with the European Union
on Wednesday. U.K.-based banks are almost certain to lose their
rights to access the EU's single market from London, Europe's
financial hub.
Only a handful of firms have indicated they will move some
operations but dozens have made inquiries, suggesting that if
so-called passporting rights are lost, banks will have no choice
but to relocate part of their operations to the European Union.
The ECB has said it is willing to forego temporarily its
requirement to pre-approve the financial models banks use to
determine risks, provided that the models have already been
approved by British authorities.
But Lautenschlaeger warned that moves to ease the relocation
process did not mean lax regulation, saying the ECB would not
try to lure banks with a "race to the bottom".
She said the current regulatory setup might encourage banks to
engage in regulatory or supervisory arbitrage but a review of
the European legislative framework could close loopholes.
(Reporting by Francesco Canepa and Andreas Framke; editing by
Andrew Roche)
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