that of how to resolve an internationally active ccp. and a lot of work still needs to be done on this score. the second avenue via which brexit could affect how financial firms gain access to the eu market are higher demands for licensing foreign bank branches and subsidiaries. take, for example, the discussion about a draft law proposing to introduce eu intermediate parent undertakings, or ipus for short. similar to the us ihcs, foreign banks would have to bring their eu operations under a single holding company. this will most likely become law ; and for good reason, because we need to have a better, consolidated understanding of what is going on at international banks doing business in europe. what ’ s more, we need to be able to act reliably in times of turmoil. otherwise, we would not be able to fulfil our mandate of ensuring financial stability. but to be clear, this instrument is by no means intended to make market entry more difficult for foreign banks – and the bundesbank will continue to advocate fair access for foreign banks. 4 / 5 bis central bankers'speeches to sum up : from the perspective of us banks and those from other third countries, brexit will impact on how they can do business in the eu single market. both the new ipu requirements and a potential enhanced equivalence approach mean a more systematic approach to ensuring fair, transparent and stable rules for the provisioning of cross - border financial services. while this may imply some new requirements, it might end up streamlining the rules and promoting clear supervisory dialogue. i am confident that us banks will not face any new barriers of any substance – that would not be in the eu ’ s interest. 6. conclusion ladies and gentlemen, as brexit changes the map of global finance, we need to think carefully about how we limit and regulate the international provisioning of financial services – because the decisions of today may become the principles of international supervision of tomorrow. the eu and the uk will become two sovereign regulatory jurisdictions, between which free cross - border provision of financial services will be limited, relative to today. we need to carefully analyse which divergence option will be best suited – in terms of financial stability, democratic accountability, and cost efficiency. no matter which direction we take, these decisions will have an indirect, albeit substantial impact on the us and other third countries to the eu. while potentially burdensome at the outset, in the long run the changes in licensing and equivalence might provide a

regime would ensure a high level of liberalisation for financial services, and regulatory equivalence would be managed by a technical committee of eu and uk supervisors, with independent arbiters dealing with cases of conflict – these solutions have many labels, a prominent one being “ mutual recognition ". i am rather sceptical about the mutual recognition approach and about similar approaches based on regulatory harmonisation through technical committees and independent arbitration mechanisms. for one thing, a solution where technical committees impede regulatory divergence could quite clearly undermine the sovereignty of jurisdictions to set their own rules and the ability to safeguard financial stability. moreover, these approaches are built on a premise : that more liberalisation is always better, and that less liberalisation is costly to economic growth. i think it is far from clear that more liberalisation is always better, as it also comes with problems – increased financial instability for example. thus, while a smart system of enhanced equivalence might be sensible, we would first have to find a suitable approach. on the other hand, the subsidiarisation option – ie requiring a foreign bank to establish an independent subsidiary – would not only be well suited to preserving financial stability and democratic accountability. it might actually also be less costly than a full - blown mutual recognition regime. my point is this : there is no ideal option on the table, nor is any one of the three second - best solutions clearly better than the others. since there will no longer be a single market for the uk and the eu, it is futile to try to tie policymakers ’ and supervisors ’ hands as far as possible through technical agreements – this would undermine sovereignty, potentially weaken financial stability, and from a societal perspective, it might not even be the most cost - efficient option on the table. 4. three questions about post - brexit cross - border supervision instead, we need to carefully analyse which divergence option is best suited. in this analysis we need to focus on three crucial questions : the first concerns the scope of a financial services chapter, assuming there is one : which financial services should be allowed to be provided across borders ; and which should be allowed to only be provided through an independent, locally licensed subsidiary? 3 / 5 bis central bankers'speeches the second question is about equivalence : can equivalence be expanded systematically without hurting democratic accountability, sovereignty and financial stability? as the approaches debated so far do not meet these criteria : how could this be done? and the third question concerns subsidiarisation : is this