November 20, 2017 / 12:44 PM / a year ago

Don't try to be clever, ECB tells City banks post Brexit

FRANKFURT (Reuters) - UK-based banks seeking access to the European Union after Brexit should avoid “inventive set-ups” to enter the single market from Britain, a top European Central Bank supervisor said on Monday.

The City of London is partly obscured by morning fog, in London, Britain, October 19, 2017. Picture taken October 19, 2017. REUTERS/Hannah McKay

Sabine Lautenschaeger said the ECB had “serious misgivings” about banks setting up a subsidiary in the euro zone only to then operate from a branch in Britain.

“We won’t accept more inventive set-ups,” she told an event in Frankfurt.

“Some banks seem to be considering the idea of establishing a subsidiary in the euro area, which would then set up a branch in the United Kingdom,” Lautenschlaeger said.

“This branch would use the subsidiary’s EU passport to enter the European market from the UK. We have serious misgivings about this,” she said.

Reporting By Francesco Canepa; Editing by Balazs Koranyi

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