We are pleased to announce that a new Working Paper by Mathias Hanten & Moritz Maier is now available on our website:
A discussion under Chatham House Rule at the Brexit lecture at the Institute for Law and Finance on 29 November 2017 initiated this Paper. A representative of a Significant Institution raised and affirmed the question whether branching back should be compliant with European law. A senior representative from an NCA strongly disagreed with this view and provided his own line of argument. The discussion became quite intense, with numerous arguments pro and contra back-branching being put forward. The main arguments in favour of branching back were based on CRD IV and the concept of the freedom to provide services. European law did not expressly prohibit or limit branching back. The main arguments against branching back were based on the legal duty of lawmakers and regulators to ensure coherence, i.e. a consistent application of harmonised European law throughout the Banking Union. This discussion was what prompted the authors to write an article, which was then published in Wertpapier-Mitteilungen 2020, p. 1293. However, the intensity of discussion, the European focus and the emergence of new arguments suggested switching to English and converting the original article into an enhanced and further developed working paper. The Banking Package, partly based on EBA’s Report to the European Parliament, the Council and the Commission on the Treatment of Incoming Third Country Branches under the National Law of Member States, in accordance with Article 21b (10) of Directive 2013/36/EU (CRD IV), delivered new thoughts but did not expressly cover the branching back topic, though it is under discussion among credit institutions and regulators.
This Working Paper intends to spur further discussion on the subject of branching back.