FRANKFURT (Reuters) - Germany’s top financial watchdog demanded on Wednesday that banks moving to Europe in the wake of Brexit be managed hands-on and on the ground.
Managers can’t fulfil their duties by just “casually dropping by”, said Felix Hufeld, president of the German regulator BaFin.
Hufeld was addressing a reception of foreign bankers in Frankfurt, which has convinced a number of banks to move operations to Germany’s financial capital as Britain prepares to exit the European Union.
Fearing a threat to financial stability, regulators want to prevent banks currently in London from setting up mere shells here that would allow them to be licensed for operating in the European Union.
“It must be ensured that executives also perform their tasks on the ground in full. Fly & Drive may be acceptable in individual cases for a transitional period, but in the long term we also expect top management to have more than a mere door sign in the EU 27 states,” Hufeld said.
Hufeld also advised banks seeking a foothold here to apply for a licence sooner rather than later and to use the move as an opportunity to upgrade outdated IT.
Reporting by Tom Sims; Editing by Georgina Prodhan