European Banks Withdraw $ 280B Worth Of Assets From Their US Holding Companies Since 2016

According to the Financial Times, four leading European banks – Swiss UBS and Credit Suisse, British Barclays and German Deutsche Bank withdrew about $ 280 billion from their US holding companies over the past three years amid tightening regulation by the US authorities.

It is reported that since 2016, large foreign banks operating in the United States have had to transfer a substantial part of their operations in the country to the management of “intermediate holding companies” (IHC), which must have sufficient capital to withstand stress tests of regulators. Regulators believe that such a system will minimize risks for the US financial system in the event of a new financial crisis.

According to FT, over the past three years, the total assets of the aforementioned European banks in their US IHC decreased by 34%, or by $ 280 billion. At the same time, the total amount of capital in these IHCs grew by 12%. In addition, it is reported that assets in direct American branches of these European banks have grown over the same period. The publication explains this by the fact that, unlike intermediate holding companies, the American branches of foreign banks are not subject to such strict regulation by the US authorities.


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