Among Brexit’s first casualties was the European Banking Authority, or EBA, currently headquartered in London. With Britain exiting the European Union, it was immediately clear that the pan-European banking regulator would need to find a new home.
At a meeting of European finance ministers in Brussels, German Finance Minister Wolfgang Schäuble today suggested the EBA should be moved to Frankfurt, and merged with the European Insurance and Occupational Pensions Authority, or EIOPA, which is currently based in the city. A merger of the two bodies would be a “rational move,” he told the meeting. The main German financial authority, Bafin, already combines oversight of banks with regulation of the insurance industry.
Schäuble suggested the EBA should be moved to Frankfurt, and merged with the European Insurance and Occupational Pensions Authority.
The EBA works to maintain financial stability in the 28-member union, and to ensure the orderly functioning of the banking sector. It is best known for administering so-called “stress tests” to European banks, assessing whether their capitalization levels are adequate to deal with possible future upheaval.
The European Commission is currently considering a merger of various financial regulatory authorities, including another body, the European Securities and Markets Authority, or ESMA, now based in Paris. Final recommendations will be tabled in mid-May, once a consultation process with euro-zone governments and important market actors has been concluded.
The final decision on these questions, including the future home of the EBA, will be taken by European heads of government. Frankfurt is not the only city looking to host the EBA: the Irish capital, Dublin, has already put forward an official request, with Amsterdam, Milan and Paris also mentioned as possible sites.
Ruth Berschens heads Handelsblatt’s Brussels office, leading coverage of European policy. To contact the author: firstname.lastname@example.org.