MEP welcomes monitoring of moves to win UK financial business

Brian Hayes calls for level playing field in bids by rival centres to gain jobs post-Brexit

Brian Hayes: “It is reassuring to know   Single Supervisory Mechanism is closely watching the hunt for business arising out of Brexit.”   Photograph: Alan Betson

Brian Hayes: “It is reassuring to know Single Supervisory Mechanism is closely watching the hunt for business arising out of Brexit.” Photograph: Alan Betson

 

Fine Gael MEP Brian Hayes has welcomed comments from the head of the Single Supervisory Mechanism (SSM) that Frankfurt will closely monitor moves by national regulators who seek to win business from financial firms looking to relocate activities from the UK in the wake of Brexit.

Danièle Nouy, who is chair of the SSM’s supervisory board, acknowledged to Mr Hayes that there are loopholes in the current rules that allow national regulators to make certain offers to financial firms as they seek to win jobs for their own countries.

Earlier this month, Eoghan Murphy, the Minister of State for Financial Services, complained to the European Commission that Ireland was being undercut by rival centres competing to host financial firms looking for an EU base post Brexit.

“It is reassuring to know that the SSM is closely watching the hunt for business arising out of Brexit,” Mr Hayes said. “There needs to be absolute consistency of regulatory approach and a level playing field when it comes to banks’ capital requirements and how their internal models are treated.”

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“Ms Nouy said that there are loopholes that can allow banks to be given lighter regulatory treatment based on their location. Some locations may allow a financial institution to be treated as broker-dealer firm, which is effectively a light version of a bank, but is not supervised as a bank.

“Ms Nouy also warned that subsidiaries or branches can be set up in the euro zone that perform a large proportion of their parent bank’s capital market operations. The important thing is that these subsidiaries are not empty shells and that they are staffed properly and have risk-management functions and internal control functions.”