Jan. 3 (Bloomberg) -- The European Union is examining whether national banking regulators are hindering the free movement of capital after Germany limited the flow of funds from units of foreign lenders in the country to their parents.
“We’re looking at what various different supervisors have been doing, including what’s being done in Germany,” Stefaan De Rynck, spokesman for EU Financial Services Commissioner Michel Barnier, told reporters in Brussels today. “There is a substantive issue, which is free movement and completion of the single market.”
Europe’s sovereign debt crisis has eroded cross-border lending to clients and prompted depositors to transfer funds to markets that are considered safe within the 17-member euro area. German financial regulator BaFin has curtailed the amount of funds foreign banks can pull out of the country on concern that it may leave their local units under capitalized.
The European Commission and London-based European Banking Authority are conducting the examination, De Rynck said. The EBA can play a “mediating role” in the event of disagreements between national regulators, he said.
“There’s a procedural issue as well -- the requirement that different national supervisors have to cooperate,” De Rynck said. “We have different national supervisors here who are obliged to cooperate with each other if they want to adopt certain measures.”
Sven Gebauer, a spokesman for Bonn-based BaFin, declined to comment on De Rynck’s comments when contacted by phone today.
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