Newsletter February 09: Britain looks for more host-supervisor powers

LONDON – Burned by both the collapse of investment bankers Lehman Brothers and the Icelandic banking system, Britain’s financial regulators look set to demand increased host-country powers to supervise local branches of foreign banks. This would go against the tide of recent years, both in the EU and globally, that has seen a move for greater supervisory oversight to be given to the home country where cross-border banks are headquartered. Although Britain has always been sceptical about this trend, cross-border banks have pressed for the home-supervisor approach in order to reduce their regulatory burden as they became more global. They wanted a single point of regulatory engagement.