28 June 2016

欧州の独立系シンクタンク、ブリューゲル社：EU（欧州連合）単一パスポートの喪失はロンドン金融街シティにとって打撃、ノルウェー型のEEA（欧州経済領域）加盟を模索するべき

1. Passporting

[...] The internal market is underpinned by a network of Directives and Regulations, which permit access to other EEA member states if a firm has a licence in one member state (the ‘home’ member state). The most important directives for financial services are:

• the Capital Requirements Directive (CRD IV, 2013/36/EU) for banking
• the Markets in Financial Instruments Directive (MiFID, 2004/39/EC) for investment services
• the Alternative Investment Fund Managers Directive (AIFMD, 2011/61/EU) for hedge funds and private equity
• the Insurance and Reinsurance Directive (Solvency II, 2009/138/EC) for insurance

We illustrate how the passport works legally with the Capital Requirements Directive (CRD IV), the legal framework for credit institutions (banks). [...]

This system of full access based on a single passport (provided by the home country supervisor) is constrained to the EEA. So, if the UK were to leave the EEA, UK licensed banks (either UK head-quartered or foreign-headquartered) would need to obtain an extra licence from the host supervisor in an EEA member state in order to offer financial services in that member state.

An extra licence would be necessary for all forms of cross-border services, ie through the establishment of a branch or subsidiary or through the direct offering of cross-border services. The UK would then become a third country, which needs to find a point of access for business in the EEA. Similarly, EEA financial institutions would need to apply for a licence to enter the UK. The other Directives apply a similar passporting system to the CRD IV.

2. Banking vs insurance

An interesting question is whether different financial sectors are equally affected by possible changes in passporting arrangements for the financial sector. We examine the two largest financial sectors, banking and insurance. It appears that banking relies far more on the passport than insurance. We measure this by differentiating cross-border business through branches (based on the passport) and subsidiaries (new licence). [...]

Finally, European banks typically use their passport to enter the London wholesale market; that is for 69 percent of the cases. Many international banks, including the major European ones, have branches operating in London, which is an international financial centre, but actually do little business with UK clients.

Summing up, insurance will be far less affected than banking if and when the UK leaves the EU. Next, the major European banks would need to apply for a UK licence, if they want to keep on doing business in London. [...] In turn, the UK banks would need to apply for a licence in the EEA. Some major banks have already a subsidiary on the continent: HSBC in France and RBS in the Netherlands. Barclays is operating through branches, for example, in Italy and France (Schoenmaker and Véron, 2016). Lloyds Bank has almost no foreign business.

3. What do the stock markets tell us?

Next to changes in passporting arrangements, the macroeconomic fallout from Brexit also damages the performance of banks and insurers. Reduced economic growth will directly affect banks in the UK as well as the rest of Europe. Lower interest rates would affect the business model of banks. Insurance companies would also suffer from lower interest rates, as the discounted value of their liabilities increases. On the asset side, insurers have made losses due to the financial market turmoil. [...]

Full blog post (with charts)

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