Reuters: Fewer than 10 UK-based banks asked for EU banking licence
Fewer than ten of the approximately 40 banks that conduct EU business out of London have applied so far for a licence to continue banking in the bloc after Britain leaves, regulatory sources told Reuters. The slow pace of applications is raising concern at the European Central Bank.
Concerns are twofold:
– The time required to apply for a banking license and to set up a new subsidiary (18 months).
– More importantly: some firms may choose the route of setting up a market division, i.e. a broker (investment firm dealing in securities), rather than a full-blown bank, which would allow to escape from the ECB banking supervision. The ECB is said “to worry that if banks avoid their supervision it could bring additional risks”.
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