EEA banking customers beware. If you don't ask, you don't get

What’s changing in the EEA banking markets?

The EU’s sixth capital requirements directive (Directive 2024/1619, CRD VI) contains new, harmonized requirements for non-EU banks and larger broker dealers (together, non-EU banks) looking to provide so-called “core banking services” (deposits, loans and guarantees and commitments) into the EU.

From January 11, 2027, non-EU banks are prohibited from providing core banking services in the EU unless they establish an authorized branch in each relevant member state or benefit from an exemption. Since CRD VI is a text with EEA relevance and will be incorporated into the EEA Agreement’s Annexes, these new requirements are expected to apply across the EEA.

The exemptions cover:

• interbank services (i.e., services provided to another credit institution)
• intragroup services
• services provided on the basis of reverse solicitation (when the service is provided “at the own exclusive initiative” of the customer).

Services that are ancillary to certain MiFID services and activities are also excluded. The scope of this carve-out is subject to debate, but beyond the scope of this note.

Although the prohibition does not come into effect until January 11, 2027, it will apply to contracts entered into or modified from July 11, 2026 (earlier contracts will be “grandfathered”), and so non-EEA banks’ sales practices will change in July.

The end of cross-border banking relationships?

In practice, the costs associated with establishing and maintaining a network of branches and/or the legal and practical difficulties of moving business lines into EEA subsidiaries mean that such options are not in fact commercially viable for many banking groups. This means that non-EEA banks may be able to provide core banking services in the EEA only in situations in which reverse solicitation (or another exemption) is available.

What does this mean for an EEA customer looking to access core banking services from non-EEA banks?

EEA customers, including non-bank financial sector entities, will need to engage more proactively to preserve their core banking relationships with, or obtain new core banking services from, non-EEA banks. This includes initiating requests for cross-border deposit, lending, guarantee or commitment services from non-EEA banks, to ensure that they maintain access to such services  from as diversified a network of providers as today, so that exposures, costs and relationships can be managed as effectively as considered prudent by the firm.

To help reduce this administrative burden, we set out in the appendix to this briefing a simple, short-form example of a letter that could be used to solicit services from a non-EEA bank.

Keep calm, write in and carry on

EEA borrowers and depositors should be aware that CRD VI is subject to national transposition and supervision, and the scope of the exemptions, including reverse solicitation, may be impacted by future guidance or legislative change.

Non-EEA banks are currently preparing for implementation of the new requirements in the face of considerable uncertainty.

At the time of writing, only nine of the 30 EEA member states have finalized their transposition measures, and six member states are yet to publicly disclose their policy proposals for implementation.

Navigating this uncertainty means that non-EEA banks must take their own risk-based decisions about the circumstances that permit them to continue to service the EEA banking market.

While in many cases, a non-EEA bank’s compliance policies and procedures will be satisfied by an unsolicited approach from an EEA borrower or depositor, the surrounding facts of a particular relationship may impact this. It therefore remains to be seen what the impact of this new restriction will be on the depth, liquidity and costs of borrowing in the EEA, and on productive finance and the competitiveness of the EEA’s banking markets.