Ms Lautenschläger (Vice-Chair of the Supervisory Board of the ECB) made the remarks whilst a technical workshop hosted by the ECB for banks considering relocating as a result of Brexit. Lautenschläger stressed that relocating will require significant and highly efficient planning efforts as well as resources.
Lautenschläger made it clear that the European regulators would not accept shell companies, saying that any bank that operates in the euro area must be a ‘real’ bank, with adequate local risk management, sufficient local staff and operational independence. The ECB would not accept a bank permanently booking all of its exposures back-to-back with another entity in the group, which would make it too reliant, with limited control over its own balance sheet.
Lautenschläger drilled home the fact that from the moment a bank hands in a complete application for a licence, it usually takes between six and twelve months before the process is finished. Against that backdrop, 29 March 2019 is closer than it appears. Still, the time it takes depends on many things: what is the quality of the application? And how well prepared is the applicant?
The ECB is urging firms to approach the ECB or the national supervisors as early as possible.