Newsletter Dec 2007: Large exposure rules may hit EU cross-border groups

LONDON – Credit exposures between different parts of a cross-border banking group in Europe may have to be included in the group’s overall large exposure limits, under new rules that are being presently thrashed out. If this approach is retained when the proposed new large exposure regime is adopted, bankers are likely to be deeply disappointed. They have argued strongly that intra-group exposures should not be part of any regulatory limit, at least for subsidiaries within the 30 countries of the European Economic Area (EEA), which includes all the 27-EU member countries.