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Single licence in the banking market

Directive grants a single banking license in the EU, enabling seamless banking activities across borders. Key provisions focus on supervision, transparency in payments systems, and balancing risks for solvency. Learn more to navigate the European banking landscape effectively.

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Single licence in the banking market

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  1. Single licence in thebanking market

  2. Allrestrictions on freedomof establishment andfreedom to provideservices in respectofself-employedactivitiesofbanksandotherfinancialinstitutionshavebeenabolishedsincethe 1970. • Therightofaccessisbased on themutualrecognitionofsupervisionsystems, i.e. applicationoftheprincipleofsupervisionof a creditinstitution by theMemberState in whichit has itshead office, andtheissueof a "single bank licence" whichisvalidthroughouttheEuropean Union. The single licence authorises a bank established in a MemberState to open brancheswithoutanyotherformalitiesor to proposeitsservices in the partner countries. Theprincipleof reciprocity governstheopening in the EU ofsubsidiariesofbanksfrom non-membercountries.

  3. Directive 2006/48 permitsthesupervisionofcreditinstitutions on a consolidated basis. Itdefinestheobjectofsupervision, consolidationmethodsandthesharingofresponsibilitiesbetweenMemberStatesforthe monitoring ofmultinationalgroups, particularlyfinancialcompanieswhosemainactivityisthe holding ofinterests in creditestablishmentsorotherfinancialestablishments. Theobjectofsupervisionissolvency, thematchbetweenownfundsandrisksand non-financialinterests.

  4. On theotherhand, Directive 2006/48 seeks to ensurethattheMemberStatescontrolexcessiveconcentrationsofexposures to a single client, thusavoidinglossesthatmightthreatenthesolvencyof a creditinstitutionandhaverepercussions on theentirefinancialsystem. • In theEuropeaninternal market, thetransparency, performance and stability ofcross-borderpaymentsystemsshouldmatchthepropertiesofthebestdomesticpaymentsystems. To thiseffect, a Directiveharmonisesthelegalframeofpaymentservices in the EU, includingtheconditionsofinformation as well as therightsandobligationsofthepartsandpurports to developtheinfrastructures, procedures, commonrulesandstandardsneededfor a pan-Europeanpaymentsystem.

  5. A clearregulatoryframeworkforelectronic money in the single market aims to enhance business andconsumerconfidence in thisnewformofpayment, whileensuringthatequalcompetitiveconditionsprevailfortraditionalcreditinstitutionsandothercompanieswhichissueelectronic money . Electronic money institutions are includedwithinthegeneralscopeoftheprovisionsofthebankingcoordinationdirectives.

  6. TheadministrativeorjudicialauthoritiesofthehomeMemberState are aloneempowered to decide on theimplementationofoneor more reorganisationmeasures in a creditinstitution, includingbranchesestablished in otherMemberStates.

  7. What directive provides a single banking license? Question

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