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ECB to supervise Irish units of Barclays, BofA Merrill Lynch due to Brexit

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ECB to supervise Irish units of Barclays, BofA Merrill Lynch due to Brexit

The European Central Bank will take over direct supervision of the Irish subsidiaries of Barclays PLC and Bank of America Merrill Lynch, beginning Jan. 1, 2019, as they were both classified as significant.

The new classification follows a request by the Central Bank of Ireland in anticipation of the expansion in Barclays Bank Ireland PLC's activities and an increase in the BofA Merrill Lynch unit's total assets following Brexit.

Bank of America Corp. recently completed the merger of its U.K. banking entity into Dublin-based Bank of America Merrill Lynch International DAC, while Barclays made Dublin its European headquarters, Reuters reported. Barclays was earlier reported to be in the process of transferring the ownership of its branches in France, Germany and Spain to its Irish unit.

In addition, following an annual review of significance and ad hoc assessments, Luminor Bank AS in Estonia and Luminor Bank AS in Latvia were added to the list of significant institutions. Banque Internationale à Luxembourg SA will also be directly supervised by the ECB after its split from Precision Capital SA, and so will be Nordea Bank Abp, which was granted a new license in Finland after relocating its headquarters there from Sweden.

The ECB said it will no longer directly supervise Dublin-based Permanent TSB Group Holdings PLC, which was not deemed significant for three consecutive calendar years. Ireland's central bank will begin supervision of Permanent TSB on Jan. 1, 2019.

The ECB also dropped supervision of five other banks over the past year because they ceased to exist. These are Nordea Bank AB (publ), Suomen sivuliike, whose parent Nordea Bank AB (publ) merged into Nordea Bank Abp; Danske Bank PLC, which transferred its business to parent Danske Bank A/S; VTB Bank (Austria) AG, which was transferred to VTB Bank (Europe) SE; and Banco Mare Nostrum SA, which merged into Bankia SA. In addition, the ECB withdrew the license of Cyprus Cooperative Bank Ltd.

The changes take the number of banks under the ECB's supervision to 119, it noted.