European Business Law, the fourth volume in our series, shows how the European authorities simultaneously abolish all restrictions on access to and exercise of economic activities and support the growth of domestic markets, through the harmonization the internal legislation or the enactment of genuinely unified regulations.

European Business Law

According to Article 58(2) TFEU, “The liberalization of banking […] services connected with movements of capital shall be effected in step with the liberalization of movement of capital”. Banking is an essential element of EU Financial services policy and was first regulated by directive in 1973  although it was limited to applying the principle of national treatment to the banking sector. Achievi …

Mutual recognition

According to Article 58(2) TFEU, “The liberalization of banking […] services connected with movements of capital shall be effected in step with the liberalization of movement of capital”. Banking is an essential element of EU Financial services policy and was first regulated by directive in 1973  although it was limited to applying the principle of national treatment to the banking sector. Achieving a true internal market in the banking sector requires the implementation of the principle of mutual recognition and a “single passport”, allowing providers of financial services legally established in one Member State to establish themselves or provide their services in the other Member States without prior authorization.

Those principles, set out in the Commission's White Paper on the completion of the internal market of 14 June 1985 , were enshrined in later legislation. Directive No 77/780 of 12 December 1977  purported to coordinate the rules relating to authorization whilst at the same time allowing the host Member States of branches to require a second authorization for any activity set up on their territory; Directive No 89/646 of 15 December 1989 , which is a minimum harmonization directive, then put in place a system of single licenses granted by the home Member State and established the principle of mutual recognition of authorizations. All the legislation was codified in maximum harmonization Directive No 2000/12 of 20 March 2000 , which was replaced by Directive No 2006/48 of 14 June 2006 and subsequently by Directive No 2013/36 of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms  and supplemented by Regulation No 575/2013 also of 26 June 2013 on prudential requirements . 

Directive No 2013/36 sets out the rules relating to the taking up and the pursuit of the business of credit institutions and their prudential supervision (Directive No 2013/36, Article 1). The preamble of the directive states that the purpose of such regulation is to effect harmonization which is necessary and sufficient to secure the mutual recognition of authorization and of prudential supervision systems, making possible the granting of a single licence recognized throughout the Union and the application of the principle of home Member State prudential supervision. The directive applies to credit institutions, defined as undertakings whose business is to receive deposits or other repayable funds from the public and to grant credits for its own account (Directive No 2013/36, Article 3(1), referring to Article 4(1)(2) of Regulation No 575/2013), with the exception of the central banks of the Member States, post office giro institutions, and the institutions of certain Member States which are exhaustively listed in Article 2 of the directive.

Directive No 73/183 of 28 June 1973, on the abolition of restrictions on freedom of establishment and freedom to provide services in respect of self-employed activities of banks and other financial institutions, OJEC L 194 of 16 July1973, 1.

http://europa.eu/documents/comm/white_papers/pdf/com1985_0310_f_en.pdf.

European Business Law

116. Mutual recognition

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Les notions juridiques connexes

116. Mutual recognition

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Les notions juridiques connexes

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au contenu exclusif Livv – juristes d’entreprise