Existing bank regulation is tailored to the model of universal banks, which offer comprehensive services. However, this model is not beneficial for fintech companies, because they often provide only part of these banking services, coupled with an individual risk profile.
To reduce the hurdles facing such companies wishing to enter the Liechtenstein financial centre, the government is to modify the banking and financial market authority acts. In principal, the Financial Market Authority will in future be able to tailor banks’ and investment firms’ minimum capital to the respective risk profiles, explained a statement.
The government revealed that the measure was intended to boost the appeal of the financial centre to the international fintech scene. The new capital requirements will be made within the European regulatory framework, thus guaranteeing access to the European Economic Area, which includes the 28 European member states as well as Norway and Iceland.
The government has now approved a consultation report concerning the modifications. The consultation period ends on 10th March.