- “It’s about 20 that have something that is already being assessed,” the ECB’s Daniele Nouy said.
- Non-EU lenders must apply for new licences to continue operating services in the bloc after Brexit.
- Major banks are all expected to shift some staff from Britain as a result.
As many as 20 lenders have applied for new EU banking licences as they make preparations for a shift in Europe’s financial services landscape after Brexit, one of the European Central Bank’s most senior figures has said.
Speaking on Tuesday, Daniele Nouy said that nearly two dozen applications for licences are “already being assessed,” following the UK’s decision last year to leave the EU.
“It’s about 20 that have something that is already being assessed,” Nouy, who is Chair of the ECB’s Supervisory Board said, according to a report in the Financial Times.
“Maybe they have not signed it, but they have made a pretty comprehensive application that can be formalised very fast.”
Under current rules, Britain is under the jurisdiction of the so-called financial passport — a set of rules and regulations that allow UK based financial firms to access customers and carry out activities across Europe. Many non-EU lenders use the passport to operate a hub in the UK and then sell services across the 28-nation bloc.
Once Britain leaves the EU, however, it is almost certain to lose passporting rights, which are tied strongly to membership of the European Single Market, a marketplace the UK intends to leave as part of Brexit.
As a result, major lenders — especially those from the USA and Japan — are making preparations to set up new hubs in continental Europe so that they can continue serving their customers in Europe without any disruption.
Banks need at least a year to set up fully functioning branches and subsidiaries in Europe to maintain activities, so are starting the process now.
Nouy is the head of the Single Supervisory Mechanism, which has final oversight of granting banking licences for all eurozone member states, and as a result is the body with the biggest say in the new licences banks need after Brexit.
Major lenders are all expected to shift staff out of the UK as a result of Brexit, with Japanese banks the fastest on the draw.
Four big Japanese banks, MUFG, Nomura, Daiwa, and Sumitomo Mitsui have all announced new EU HQs, with three choosing Frankfurt, and one, MUFG, opting for the Dutch capital Amsterdam. American giant Citigroup also confirmed that it will send some staff to Frankfurt, while Goldman Sachs CEO Lloyd Blankfein recently tweeted that he’d be “spending a lot more time” in the city.