geofinance in the domestication of retail banking. the structural reform of major uk banks and a small number of international banks will help anchor their safety and soundness. and by guarding against the risks of double leverage, we are ensuring that uk banking groups operating around the world are robust. but signals from overseas suggest that geofinance could go too far, too fast. bringing up the borders in wholesale finance would be regrettable for all sides, be they the home or host of international groups. to finish where i started : although it makes our job more challenging, it is a good thing that investors putting capital at risk in london provide insurance cover for properties hit by hurricanes in florida. it is a good thing that banks are able to provide some services across borders, whether between the uk and our fellow nations in europe or further afield. and it is a good thing that we have, to date, been able to agree global capital standards for banks. doing all of these things efficiently and effectively relies on a strong degree of trust and co - operation between public authorities across borders. we hope we can secure that in the years ahead. all speeches are available online at www. bankofengland. co. uk / speeches

. the home state usually leads its prudential supervision. why does this geofinancial distinction matter? branches allow a more fluid movement of resources and diversification of risks within a group. but they also put the greatest reliance on the home supervisor and on cross - border co - operation. extending the logic of domestication retail deposit - taking is a critical economic function and local supervisors have more levers over subsidiaries than branches. therefore – consistent with the icb ’ s logic – we have preferred for several years that international banks from outside the eea ( known as ‘ third countries ’ ) with more than £100m of retail and sme fscs - covered transactional or instant access account balances put them in a subsidiary. there are not many of these : most international banks in retail focus on small expatriate or diaspora communities, or on particular niches in private banking. we expect each of these firms to have a viable and sustainable uk business model which accretes a portion of its own capital, rather than being reliant on its parent, with high standards of risk management and governance. see the pra annual report and accounts ; july 2017 and u. s. department of the treasury ; a financial system that creates economic opportunities ; june 2017. see ss10 / 14 : supervising international banks : the pra ’ s approach to branch supervision ; september 2014. all speeches are available online at www. bankofengland. co. uk / speeches embargo : not for release before 19 : 30 on wednesday 4 october 2017 these retail subsidiaries are not as insulated as the financial and operational separation required by the icb. but with a much lower threshold than the £25 billion of core deposits at which ring - fencing kicks in, our policy follows the same logic, proportionately applied. under passporting, currently we cannot apply our preference for retail subsidiaries to banks from elsewhere in the eea. it would be odd to continue with this if the uk and eu27 become third countries following brexit. subject to the negotiations, our current planning assumption is therefore that all international banks will need to put material retail business in a subsidiary. this should be no surprise given our existing policy – we are engaged on this with the handful of relevant branches and will continue to promote a smooth transition. how far does this logic go? overseas there are moves afoot to apply elements of this logic to other parts of financial services, in particular to wholesale banking. why