UK and US banks may utilise an exemption to lending rules to maintain activity within the EU from January, Reuters reports citing sources

UK and US banks may utilise an exemption to lending rules to maintain activity within the EU from January, Reuters reports citing sources.

Exemptions of this kind sit in the long tail of post-Brexit and third-country access arrangements, where regulators have repeatedly preferred interim carve-outs to hard cutoffs once the alternative was a visible disruption to client activity. The pattern in comparable episodes has been that scope definitions matter more than the headline permission: whether the exemption covers new lending or only legacy books, which entity can rely on it, and whether it is time-limited determine how much actual balance sheet stays in place. Watch for whether this is a supervisory forbearance or a formal legal text, since informal tolerance has historically been withdrawn faster than codified relief. The actors to track are the EU-level rulemakers and the national supervisors in the jurisdictions where the banks book the business, as divergent national treatment has been the usual friction point. Follow-ons worth noting are confirmation from the named banks, any conditions attached to the exemption, and whether other third-country groups seek equivalent treatment, which has tended to be the next step once a precedent is set.