EU regulator reveals 12 banks so far plan euro expansion ahead of Brexit

The ECB has warned British banks that want to move to the EU that they cannot simply set up a shell company in the euro zone as Brexit looms. (AFP)
Updated 08 February 2018
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EU regulator reveals 12 banks so far plan euro expansion ahead of Brexit

FRANKFURT: A top European financial supervisor said that so far a dozen banks are making definite plans to expand their business in the eurozone ahead of Britain’s departure from the European Union — and that time is getting short for others that may want to make the same move.
Sabine Lautenschlaeger warned Wednesday that banks both in Britain and the European Union need to be ready for a so-called hard Brexit, in which the UK leaves the bloc without a transitional period to ease the changeover.
Under a hard Brexit, Britain would exit the 28-country EU and its free-trade zone completely when the deadline arrives in March 2019. That means banks that have been operating in London would lose their automatic right to do business throughout the rest of the bloc.
That includes non-UK banks that had been using London as their gateway to Europe. A transition period could provide time for banks to adjust to new rules of trade.
“We cannot be sure whether the transitional period will really happen,” said Sabine Lautenschlaeger, the vice chair of the European Central Bank’s banking supervisory board. “Banks must continue to prepare for any outcome, including a hard Brexit.”
Prime Minister Theresa May’s government is preparing to negotiate new terms of trade with EU officials and it remains unclear whether the parties will agree on transitional arrangements or make an abrupt break.
Lautenschlaeger said at a news conference in Frankfurt, Germany, that banks that want to relocate from London to the 19 EU countries that use the euro currency should have submitted their license application already.
She said eight banks have already applied and four others have indicated they plan to substantially increase their activities in the 19-country currency union, of which Britain has not been a member. She said European supervisors had had preliminary meetings with more than 50 banks.
She said that depending on how Brexit negotiations go, banks might get more time to relocate — but only those that have already presented “credible plans” to do so.
She said eurozone banks that want to do business in Britain also need to get ready for Brexit by submitting license applications to the British supervisor, the Prudential Regulatory Authority.
Lautenschlaeger warned banks that want to move that they cannot simply set up a shell company in the eurozone. “Banks must be real banks if they want to operate in the euro area,” she said.


Urgency needed to boost Palestinian economy: IMF chief

Updated 26 June 2019
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Urgency needed to boost Palestinian economy: IMF chief

  • The MF has been warning of severe deterioration in the Palestinian economy
  • ‘If there is an economic plan, if there is urgency, it’s a question of making sure that the momentum is sustained’

MANAMA: IMF chief Christine Lagarde said Wednesday that major economic growth was possible in the Palestinian territories if all sides showed urgency, as she took part in a US-led conference boycotted by the Palestinian leadership.
The International Monetary Fund has been warning of severe deterioration in the Palestinian economy, with tax revenue blocked in a dispute with Israel which has also imposed a crippling blockade on the Gaza Strip for more than a decade.
“If there is an economic plan, if there is urgency, it’s a question of making sure that the momentum is sustained,” said Lagarde.
The IMF chief is attending a conference in Bahrain to discuss the economic aspects of a United States plan for Israeli-Palestinian peace, which has already been rejected by the Palestinians as it fails to address key political issues.
Lagarde said for the US plan to work “it will require all the goodwill in the world on the part of all parties — private sector, public sector, international organizations and the parties on the ground and their neighbors.”
Citing examples of post-conflict countries, Lagarde said that private investors needed progress in several sectors including strengthening the central bank, better managing public finance and mobilizing domestic revenue.
“If anti-corruption is really one of the imperatives of the authorities — as it was in Rwanda, for instance — then things can really take off,” she said.
The plan presented by White House adviser Jared Kushner calls for $50 billion of investment in the Palestinian territories and its neighbors within a decade.
The proposals for infrastructure, tourism, education and more aim to create one million Palestinian jobs.
Gross domestic product in the Gaza Strip declined by eight percent last year, while there was only minor growth in the West Bank.
Kushner, opening the conference on Tuesday, called the plan the “Opportunity of the Century” — and said the Palestinians needed to accept it before a deal can be reached on political solutions.
The Palestinian Authority has rejected the conference, saying that the US and Israel are trying to dangle money to impose their ideas on a political settlement.
Washington says it will unveil the political aspects of its peace deal at a later date, most likely after Israel’s September election.