ECB Tells Banks to Properly Staff Brexit Hubs in EU

By Huw Jones

LONDON (Reuters) – Not all banks have met their staffing targets for new Brexit hubs in the European Union, even though Britain has fully left the bloc, the European Central Bank’s top banking regulator said on Thursday.

Bankers have said that the travel restrictions due to the pandemic have made it harder to shift staff to new locations, but EU regulators are running out of patience.

As expected, the City of London become largely cut off for the EU from Jan. 1, because Britain’s trade deal with the bloc does not cover financial services.

Andrea Enria said banks from London that have opened or expanded operations in the bloc to avoid being cut off from EU investors have known for a “long while” what the ECB expects their operating models to open in January.

“My impression is that there are still some sticking points,” Enria told a news conference.

The ECB regulates top lenders in the euro zone, including some of the Brexit hubs, to make sure they meet their licence requirements such as staffing.

“One key issue for our attention is that we have sufficient strategic and risk-management capacity onshore here. We are not there yet, for some banks we are but not for all the banks,” Enria said.

EU regulators want banks to locate the bulk of their euro zone activity in the currency area and reduce reliance on centralised booking of transactions in London.

“The reliance on back-to-back booking and on outsourcing is another area of which is of great attention for us, but there has been very good engagement with all the banks. They know what we are asking of them,” Enria said.

“We have seen significant progress also in the final months of last year, so we are encouraged that we will get to the target operating model pretty soon.”

Earlier this week, TP ICAP, the world’s biggest inter-dealer broker, said it has to stop serving some EU customers because regulators in France say it does not have sufficient staff in its Paris hub.

(Reporting by Huw Jones, editing by Larry King)