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Single licence in the banking market

Single licence in the banking market. All restrictions on freedom of establishment and freedom to provide services in respect of self - employed activities of banks and other financial institutions have been abolished since the 1970.

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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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