Cross-border lending in the EU: Key regulatory considerations

Historically, Europe has been a bank-dominated market where bank loans are traditionally seen as the main source of financing for both businesses and individuals. This strong bank-dependent ecosystem has provided a fertile ground for the exponential growth of the banking sector in the EU that has particularly grown in size in the aftermath of the 2008 global financial crisis. One of the major catalysts for this, was the creation of the EU Banking Union in 2014 which was aimed to provide the basis for the stabilisation as well as further integration of the EU banking sector.

The broader financial services sector in the EU has in the meantime managed to become increasingly interconnected, with consumers and businesses having access nowadays to a variety of financial services at their fingertips. The lending space has also experienced the emergence of new entrants that are opening new avenues for consumer and SME financing in particular by offering new flexible financing products like revenue-based-financing and buy-now-pay-later.

But what are some key regulatory concerns that impact all categories of lenders that are active in cross-border transactions in the EU?

Find out in this article (PDF)