FREE MOVEMENT OF CAPITAL : EXEC 'LOOKS INTO ACTIONS' TAKEN BY NATIONAL SUPERVISORS.

Experts from the European Banking Authority (EBA) and the European Commission are reviewing certain actions taken by national supervisory authorities. Their goal is to ensure the free movement of capital in the European Union and compliance by national supervisory authorities with obligations to cooperate with one another. The EBA is empowered to take action if necessary.

A European Commission spokesman confirmed, on 3 January, that the executive is 'looking into the actions taken by different national supervisors,' including actions in Germany (see Europolitics 4556-4557). This comment came on the heels of revelations by the German economic daily Handelsblatt that the Commission and EBA were examining whether the German financial supervisory authority, BaFin, may have limited the transfer of capital between banks and their foreign subsidiaries, ie outside Germany, in breach of single market rules.

Contacted by Europolitics, the EBA declined to comment on the report or on which authorities were concerned. It simply pointed out the fundamental importance of ensuring free movement of capital in the European Union, one of the four fundamental freedoms established in the EU treaties.

The European experts are examining whether measures taken by certain national supervisory authorities may be hampering capital movement in the Union. For BaFin, for example, they allegedly wish to determine whether the German authority may have hampered...