Tuesday , December 18 2018

Japan, China bank groups challenge EU rule changes

LONDON / Reuters

The Japanese Bankers Association (JBA) and the China Banking Association (CBA) have joined forces to challenge proposed European Union regulations aimed at policing possible market risk posed by foreign lenders doing business in the bloc.
In a letter to the European Commission seen by Reuters, the JBA and CBA — which represent hundreds of lenders from both Asian economic powerhouses — said a draft proposal to compel foreign banks to bring EU operations under a single holding company threatened the commercial viability of their activities in the region.
The trade bodies, whose members include Japan’s largest lender MUFG Bank and Industrial and Commercial Bank of China, said that the so-called intermediate parent undertaking (IPU) could trigger “multi-million one-off reorganisati- on costs” and significant ongoing charges.
“…the IPU requirement potentially makes our business model in the EU unsustainable, and could affect our fundamental capabilities to provide financial services to EU clients,” the letter said. “In short, the IPU proposal makes the EU a less attractive place for us to deploy our capital and do business.”
In February, Reuters reported that Bulgaria, which currently holds the EU presidency, had called for a softening of the proposed rules, saying that the requirement to set up a single holding company should only kick in when a foreign bank has total assets of at least 40 billion euros in the EU.

About Admin

Check Also

Australia central bank sees rates on hold

Bloomberg Australia’s economy faces a trifecta of risks that could disrupt household spending and the ...

Leave a Reply

Your email address will not be published. Required fields are marked *