EC set for single banking passport
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Your support makes all the difference.NEW regulations to allow a single banking 'passport' throughout the European Community have been laid in parliament, to come into operation on 1 January.
Banks will be allowed to set up branches anywhere in the EC on the basis of authorisation by the state in which their parent bank is situated. The main responsibility for supervising branches of EC banks in London will shift to the home country rather than the Bank of England.
But with the Bank of Credit and Commerce International fraud in mind, there will be emergency provisions for supervisors in host countries to take action if the home country fails to do so. Supervision of BCCI was split between Britain and Luxembourg.
A revised list of authorised banks is to be circulated shortly, which will identify, as a separate category, European banks entitled to establish UK branches. The branches will be covered by the UK deposit protection scheme.
The provisions are nearly ready throughout Europe, with only Belgium and Spain likely to delay completing their legal changes beyond the end of the year.
But a key back-up to the single passport scheme - an agreement on minimum standards for investor compensation schemes in case of bank failures - is lagging further behind.
Monetary officials said the single passport required a new degree of co-operation between banking supervisors.
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