| Author (Corporate) | Bank of England |
|---|---|
| Series Title | News |
| Series Details | 20.12.17 |
| Publication Date | 20/12/2017 |
| Content Type | News, Report |
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As discussions on the UK’s future relationship with the EU continued the Bank of England announced on the 20 December 2017 that it was consulting on an updated approach to authorising and supervising international banks and insurers, and it is issuing guidance on its approach to international central counterparties (CCPs). Further information The foundation of the Bank of England’s approach was the presumption that there would continue to be a high degree of supervisory cooperation between the UK and the EU. On this basis, EEA banks and insurers may (if they are not conducting material retail business) apply for authorisation to operate as a branch in the UK. There were expected to be no implications of the proposed policy for the current operations of banks and insurers from non-EEA countries such as the US, Switzerland and Japan. This approach was rooted in the substantial evidence that openness supported economic dynamism through a range of channels, raising growth and boosting living standards. The UK’s financial system was both a national asset and global public good. Keeping the UK’s financial system open to foreign institutions was in the best interests of the UK, EU and global economies. Having a large financial sector brought substantial benefits to the UK. A deep and liquid financial market lowered the cost of finance to households and businesses. The financial services sector accounted for 7% of output and was a source of over 1 million jobs, two thirds of which were outside London. It contributed around £70bn, or 11%, of annual tax revenues. The UK’s financial sector also brought substantial benefits to EU households and firms, allowing them to access a broad range of services efficiently and reliably. UK-located banks underwrote around half of the debt and equity issued by EU companies. UK-located banks were counterparty to over half of the over-the-counter (OTC) interest rate derivatives traded by EU companies and banks. As many as 30 million EEA policyholders were insured through a UK-based insurer. Central counterparties (CCPs) located in the United Kingdom provided services to EU clients in a range of markets. UK-located asset managers accounted for 37% of all assets managed in Europe. There were 160 branches of international banks in the UK, of which 77 were from the EEA. Their assets totalled £4 trillion, which was substantially larger than UK GDP. There were also 110 branches of international insurers in the UK, of which 80 were from the EEA. |
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| Source Link | https://www.bankofengland.co.uk/news/2017/december/approach-to-authorisation-and-supervision-of-international-banks-insurers-central-counterparties |
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| Subject Categories | Business and Industry, Internal Markets |
| Countries / Regions | Europe, United Kingdom |
