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Citibank Ireland to retain access to EU market due to ECB supervision

The Irish arm of Citibank will now come under the supervision of the European Central Bank (ECB) due to an increase in the size of its operation after it merged with UK based Citibank International in 2016.22 Nov 2016

Financial regulations expert Michael Ruck of Pinsent Masons, the law firm behind Out-Law.com said Citibank will be pleased with the announcement as it will gain access to the EU market following Brexit.

"The decision that the ECB will regulate Citibank Ireland, which now includes its UK based entity, is certainly positive for Citibank that they will continue to have access to the EU market following Brexit.  As with most banks, a lot of thought and resource is currently being employed on assessing the various options available to them and how they can ensure access to both the EU and the UK," Ruck said.

The ECB's latest 'assessment of significance' has reduced the number of banks that it directly supervises from 219 to 217, it said in a statement.

The drop in numbers on the ECB's list of significant lenders is due to the merger of WGZ Bank and DZ Bank and the restructuring of State Street Bank Luxembourg and RFS Holding, plus the addition of Citibank Holdings Ireland as a result of its increased size over the past year, the ECB said.

Citibank Holdings Ireland will be directly supervised by the ECB from 1 January 2017, the ECB said.

The ECB reviews its list of significant lenders each year, based on criteria including total assets and cross-border activities. Banks are then classified as either significant or less significant. Significant credit institutions are directly supervised by the ECB, whereas less significant credit institutions are supervised by a national authority.

The ECB is the central bank for the euro and it is tasked with maintaining the euro's purchasing power and securing price stability in the euro area. Following the financial crisis, EU member states' finance ministers agreed to appoint the ECB the single regulator for the biggest banks in the euro zone.