A comparative analysis of the US and EU retail banking markets - Wsbi

- As far as fees are concerned, the OCC has an
extensive fee schedule for transactions, such as
mergers and branch applications. In contrast, the
State banking departments in charge of banking
supervision generally charge filing fees on fewer
types of transactions, and in those instances
where they do charge, those fees tend to be less
than those of the OCC 168 .
4.2.3.2 Europe
4.2.3.2.1 EU level
The ‘taking up and pursuit’ of the business of credit
institutions is dealt with in the EU by Directive
2000/12/EC. Contrary to the situation in the United
States, the granting of an authorisation to do business
to a credit institution is the exclusive responsibility of
the Member States. However, while the authorisations
are granted by the individual Member States, the
conditions under which an authorisation can be
granted are increasingly defined at the EU level and
applicable throughout the EU.
This evolution is intrinsically linked with the decision
to introduce the principle of the single passport, which
means that with a licence granted by one Member
State, a financial institution (e.g. credit institution or
insurance undertaking) can provide services or open a
branch in another Member State 169 . The single passport
system is indeed based on three key principles:
harmonisation of the key aspects at the EU level
(“minimum harmonisation”), prudential supervision
performed by the home Member State and mutual
recognition (of the authorisation and of the prudential
supervision performed by the home Member State).
These three elements are considered as the building
blocks for the achievement of the internal market.
The minimum requirements specified at EU level with
respect to the taking up and pursuit of the business
of credit institutions cover issues such as requirements
in terms of own funds (including the existence of
an initial capital of at least €5 million) and specific
conditions regarding the management body, the
shareholders and members 170 .
The three principles of minimum harmonisation,
home country supervision and mutual recognition
have been applied in the different financial sectors.
This has resulted in the creation of a single passport
for UCITS (Undertakings for Collective Investment in
Transferable Securities) 171 , for investment firms 172 , for
insurance undertakings and more recently for
regulated markets 173 .
4.2.3.2.2 Member State level
As stated above, authorisations to do business are
granted by the individual Member States, and this
is the case for all types of financial institutions.
The competent authorities of the Member States
may also withdraw an authorisation, in particular
when the minimum conditions under which an
authorisation was granted are no longer fulfilled.
4.2.3.3 Comparison
Differences between the American and European
banking systems on the issue of authorisation to
bank are considerable. While a fundamental feature
of the US system is the “dual chartering of banks”,
in Europe there is no dual charter, but rather a
‘division of tasks’: most of the criteria for the taking
up and pursuit of the business of banks are set at
the EU level, with the authorisations granted (and
withdrawn) by the individual Member States.
In a document published in June 2005, the Conference
of State Bank Supervisors (CSBS), together with the
American Bankers Association, provides its views on
the benefits of charter choice and why dual
chartering works 174 . The document develops three
main arguments: “dual chartering in banking has
strengthened the state charter”, “dual chartering
fosters innovation in financial products” and “dual
chartering fosters better financial supervision”.
168 The complete list of assessment fees is available from the website of the OCC at the address: http://www.occ.treas.gov/fees.htm.
169 In the case of banking for example, the single passport was introduced by the second banking Directive of 1989.
170 See Title II “Requirements for access to the taking up and pursuit of the business of credit institutions” of the Directive 2000/12/EC of the European Parliament
and of the Council of 20 March 2000 relating to the taking up and pursuit of the business of credit institutions (“consolidated banking Directive”).
171 Directive 85/611/EEC of the Council of 20 December 1985 on the coordination of laws, regulations and administrative provisions relating to undertakings for
collective investment in transferable securities as amended by Directives 88/220/EEC, 95/26/EC, 2000/64/EC, 2001/107/EC and 2001/108/EC.
172 Council Directive 93/22/EEC of 10 May 1993 on investment services in the securities field, amended by Directive 2004/39/EC of the European Parliament and
of the Council of 21 April 2004 on markets in financial instruments.
173 Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments.
174 “The benefits of charter choice – the dual banking system as a case study”, American Bankers Association and the Conference of State Bank Supervisors,
June 24, 2005.
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