1 Foreword
In this document, the terms "licence" and "authorisation" are used interchangeably, as are the terms "bank" and "credit institution".
Licensing of credit institutions is essential for the public regulation and supervision of the European financial system. Confidence in the financial system requires public awareness that banks can only be operated by entities that are licensed to do so. Licensing also contributes to the enforcement of good practice by ensuring that only robust banks can enter the market.
At the same time, licensing should not hinder competition, financial innovation or technological progress. Once licensed, credit institutions in the EU can, in principle, perform a wide range of activities. Licensing therefore promotes a level playing field throughout the EU and reduces the risk that entities will circumvent banking regulation and supervision.
Since 4 November 2014, the European Central Bank (ECB) has been exclusively competent to authorise all credit institu
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