China’s central bank on Tuesday asked the European Union authorities to reconsider proposed rules that require foreign banks to set up parent holding companies for supervisory purposes, if they have assets of 30 billion euros or more.
The European Commission proposed in 2016 that banks headquartered outside the bloc consolidate their EU activities under holding structures called “intermediate parent undertakings”, or IPUs, which would mirror similar regulatory moves in the U.S.
The IPU framework is designed to allow regulators to more closely monitor foreign banks operating within their jurisdiction.
The People’s Bank of China said in a statement on its website that the 30 billion euro threshold was too low, noting the sizes of Chinese banks operating in the EU are small.
It said the new rules would limit banks’ ability to offer loans and raise funds if their operations were included in the EU’s IPU supervision framework.
It also asked the European authorities not to include the total assets of branches at non-EU financial institutions in their calculations on the setting-up of an IPU.
The joint letter, issued by the People’s Bank of China and China Banking Regulatory Commission, was in response to the latest suggestions by the Council of the European Union in November with regards to IPUs.
Source: Reuters (Reporting by Stella Qiu and Beijing Monitoring Desk; Editing by Sam Holmes)