Extract
[...] There may be additional costs related to additional requirements, such as providing documents or local law firm opinions, but this is not a major obstacle, at least for large credit institutions operating within the European Union or beyond its borders. When a bank is subject to strict rules like those of the Union, it does not encounter major difficulties in setting up abroad. However, the the way of working and especially the internal control organization differ depending on whether one chooses a branch or a subsidiary. Subsidiary The subsidiary benefits from a autonomy proper to legal and of a distinct legal personality of that of her mother. [...]
[...] Thus, the host country's authority monitors whether an establishment, through its subsidiary, complies or not with these obligations. If the host country's authority notes shortcomings to the regulation applicable, the procedure requires it to be inform the authority of the country of origin. It is then up to this authority to take the measures necessary so that the branch of the credit institution complies with the regulation in force in the host Member State. If the authority of the home country does not take the required measures and does not impose on its branches to respect the provisions of the applicable European or national law, the host country authority has a power of sanction. [...]
[...] Each entity of a banking group with legal personality, if it is a credit institution or a financial institution, must have its own executive directors. The interest of the subsidiary lies in this autonomy. Branch The branch, as for it, has not no legal personality. It is only a extension of the business assets of the bank in a another Member State, directed not by an independent representative, but by an employee, is often called director, but who does not exercise executive functions and has not does not have the power to represent its branch. The branch managers are therefore not effective leaders. [...]
[...] However, it remains that the host country's authority retains a residual power, notably in the case of a inaction of the authority of the country of origin. This residual power allows [...]
[...] On the other hand, if activities are compartmentalized by member state in autonomous structures, equipped with effective directors responsible criminally, administratively and civilly for the wrongful acts committed, it is obviously more comfortable for the CEO of the parent company. Not counting specific strategies that may develop in this context, as in other sectors. Therefore, in some banking groups, a a predominance of subsidiaries over branches, mainly due to the enjeux of internal control and responsibility. In fact, although it is possible to terminate an employee who has committed a fault, the Responsibility before regulatory authorities, as well as civil and penal jurisdictions, lies with the effective directors. [...]
