The Second Banking Directive of the European Economic Community and Its Importance for Non-EEC Banks

This article discusses the revised Article 7(4) of the European Communities' Proposal for a Second Council Directive on the Coordination of Laws, Regulations and Administrative Provisions Relating to the Taking-up and Pursuit of the Business of Credit Institutions. The article argues that the revision of the proposal for the Second Directive by the Commission of the European Communities will mainly have two effects. First, the Commission's review procedure will no longer be on a case-by-case basis, but on a country-by-country basis; the Commission will no longer interfere with an individual authorization procedure before the competent authorities of a Member State. Second, the suspension of future authorizations depends on a finding by the Commission that a specific country does not grant national treatment to EEC institutions; lack of reciprocity is no longer a basis for a denial of an application.

This new approach will allow the Commission to defend against discriminations against EEC institutions abroad, while respecting different banking policies in third countries.