FRANKFURT, Aug. 16 (Xinhua) -- All affected banks should prepare themselves for a hard Brexit, vice-chair of the supervisory board of the European Central Bank (ECB) Sabine Lautenschlaeger said Wednesday via newsletter, urging banks interested in relocating their operations from Britain to the euro area to take decisions very soon.
"A number of the larger banks have made progress in their planning," said Lautenschlaeger, adding that not many final decisions had yet been made and that banks seemed very cautious about taking decisions, as EU cities like Paris, Frankfurt, Dublin, Luxembourg, Amsterdam vie for London's bankers.
"We only have a narrow time frame in which to assess plans and applications, following a standard process we have already communicated." Lautenschlaeger reminded.
The two-year Brexit negotiations which kicked off in June are due to resume at the end of this month, leaving a number of uncertainties for European banking sector, mainly due to the open question of market access.
Lautenschlaeger emphasized that although London would stay an important global financial hub, it would no longer be an automatic entry point to the European Union (EU).
In terms of the banking supervision policy against the backdrop of Brexit, she said the ECB had developed a number of relevant policy stances together with the national supervisors.
"These policy stances clarify how we will treat banks in the context of Brexit without compromising our standards," she added.
The ECB is now fully in charge of granting licences to all banks in the euro area, regardless of their size. By closely reviewing the new set-ups in the licensing phase, the ECB tries to prevent the creation of "empty shells" in the euro area.
Since the establishment of the Single Supervisory Mechanism in 2014, the ECB has taken over responsibility for euro area banking supervision and now directly supervises 124 banks which hold almost 82 percent of banking assets in the euro area.
