Financing – The European Central Bank is investigating London’s hidden dependence on banks like Goldman Sachs

To ensure that risks related to EU customers are also supervised in the eurozone, the European Central Bank and national supervisors are examining where key bank employees are and where they book their transactions.

Auditing, known as “office mapping”, is concerned with, as we hear, the European Union branches of international banks such as Goldman Sachs, Citigroup, JPMorgan Chase, Bank of America, Barclays and Morgan Stanley. The European Central Bank asked banks detailed questions about risk management. It concerns the location of the merchants and the risk personnel associated with them as well as the question of how the business is carried out.

Nearly five years after Britain voted to leave the European Union, banks and regulators continue to grapple with the practical fallout. It remains uncertain what the long-term regulations for financial services will look like.

In particular, the European Central Bank is trying to curb the practice of “back-to-back bookings”, whereby banks serve clients in Europe while keeping their capital and key employees in the United Kingdom. According to the European Central Bank, such an approach makes risks harder to control.

According to people, the audit is part of an effort to keep supervisory practice comparable and to enforce uniform standards. A spokeswoman for the European Central Bank said the exercises were at an early stage and were still under way.

(Bloomberg)