BRUSSELS —
The EU will require big foreign banks operating in Europe to set aside billions in reserve funds in a tit-for-tat move against the United States that could also affect post-Brexit Britain, according to a draft proposal seen by AFP.
The European Commission, the executive body of the 28-nation European Union, on Wednesday will announce a series of new banking regulations that will include the new requirement.
“We are actually mirroring what the U.S. has already done,” a European source said in advance of the announcement of the new capital requirements.
The U.S. in 2014 angered Brussels when it suddenly required major European banks—such as Germany’s Deutsche Bank—to park billions in the United States in case problems at their subsidiaries threatened to involve the U.S. taxpayer.
The EU warned at the time that these extra costs risked sparking a protectionist reaction in Europe.
If approved into EU law, the new measure would require major …
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