EU Probes National Curbs on Cross-Border Bank Capital Transfers

The European Union is studying whether national regulators broke EU rules by taking steps to stop banks from moving funds across the bloc’s internal borders.

The European Commission, the 27-nation EU’s executive arm, is “looking into this and monitoring closely what is happening,” Stefaan De Rynck, a spokesman for Michel Barnier, the EU’s financial services chief, said in an e-mail. The Wall Street Journal reported today that the EU was considering taking steps against national regulators that restrict banks from freely moving funds.

German and Italian regulators clashed over a move by Unicredit SpA (UCG) to allocate funds raised from German depositors to its central Italian unit, and the U.K. Financial Services Authority has pressured the U.K.-based units of EU banks to change their legal structure so that the FSA can set capital requirements, the Wall Street Journal reported.

“All supervisors concerned should talk to each other and cooperate with a view to respecting free movement of capital and the single market for banking,” De Rynck said. “These are fundamental matters.”

The European Banking Authority also has the power to step in and investigate cases where regulators may have unfairly blocked banks from moving funds, De Rynck said. The EBA can mediate disputes between supervisors, he said.

“We are following the actions taken by national supervisors, both procedurally in terms of their duty to cooperate with each other in the EU, and in terms of substantive actions taken,” De Rynck said.

To contact the reporter on this story: Jim Brunsden in Brussels at jbrunsden@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net