Brexit: Options for Banks from the UK to Access the EU Market

14 Pages Posted: 9 Jun 2017

See all articles by André Prüm

André Prüm

Universite du Luxembourg; European Banking Institute

Date Written: June 8, 2017

Abstract

UK banks who want to maintain an access to the EU market after BREXIT are currently assessing their options. The prospect of a free trade agreement with the EU remaining uncertain, they cannot rely on such an agreement before taken a decision. The present paper sketches the three main options – i.e. servicing EU client directly from the UK, creating a branch or establishing a subsidiary – comparing their benefits and restrictions under the GATS rules and the free movement of capital and freedom of establishment under the EU Treaties. The focus is on traditional banking activities leaving aside investment services. Whilst acting through a EU based subsidiary appears to be the most promising option for UK banks who ambition to serve clients on a EU scale, the choice of location is not trivial as Member States are competing to attract such subsidiaries to their jurisdiction. The ECB in its supervisory role of the banking sector has already signaled that it will not allow such competition to result in a supervisory arbitrage.

JEL Classification: K20, K22, K23

Suggested Citation

Prum, Andre, Brexit: Options for Banks from the UK to Access the EU Market (June 8, 2017). European Banking Institute Working Paper Series 2017 – no. 7. Available at SSRN: https://ssrn.com/abstract=2983087 or http://dx.doi.org/10.2139/ssrn.2983087

Andre Prum (Contact Author)

Universite du Luxembourg ( email )

4, rue Alphonse Weicker
Luxembourg, L-2721
Luxembourg
+352 4666446300 (Phone)

HOME PAGE: http://www.uni.lu

European Banking Institute ( email )

Frankfurt
Germany

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