Banks will increasingly structure themselves as subsidiaries rather than as branches when operating overseas as a result of the introduction of "living wills", the U.K. Treasury's financial services secretary, Paul Myners, said Wednesday.
"I think...we are going to see a move towards more use of subsidiaries in financial services as a consequence of the importance we and others are placing on the concept known as the living will," Myners said.
Subsidiaries in the U.K. are regulated by the U.K.'s Financial Services Authority, while branches are regulated by the home regulator of the bank. Banks in the European Union, however, have the right to operate as branches in another country in the region, with the most important regulation conducted by their home regulator.
-By Adam Bradbery, Dow Jones Newswires; 44 20 7842 9305; adam.bradbery@dowjones.com