Recital 17

(17) The regulation of branches established by undertakings in a third country to provide banking services in a Member State is subject to national law and only harmonised to a very limited extent by Directive 2013/36/EU. While third-country branches have a significant and increasing presence in Union banking markets, they are currently subject only to very general information requirements, but not to any Union-level prudential standards or supervisory cooperation arrangements. The complete absence of a common prudential framework leads to third-country branches being subject to disparate national requirements of varying levels of prudence and scope. Furthermore, competent authorities lack comprehensive information and the necessary supervisory tools to properly monitor the specific risks created by third-country groups operating in one or more Member States through branches and subsidiaries. There are currently no integrated supervisory arrangements in relation to them and the competent authority responsible for the supervision of each branch of a third-country group is not obliged to exchange information with the competent authorities supervising the other branches and subsidiaries of the same group. Such a fragmented regulatory landscape creates risks to financial stability and market integrity in the Union and should be properly addressed through a harmonised regulatory framework on third-country branches. Such a framework should comprise minimum common requirements on authorisation, prudential standards, internal governance, supervision and reporting. That set of requirements should build on those that Member States already apply to third-country branches in their territories and should take into account similar or equivalent requirements that third countries apply to foreign branches, in order to ensure consistency between Member States and align the Union’s regulatory framework for third-country branches with the prevailing international practices in this field.

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Source: EUR-Lex CELLAR · retrieved 2026-09-04 · Text as adopted (Official Journal); later amendments are not incorporated in this text.