Weekly Global News Wrap Up: Foreign banks in EU face increased regulatory scrutiny; Banks mull expanding employee surveillance

And find out how fintech pushed EU to revise bank software rules.

From Reuters: Nineteen foreign banks in the European Union will need to set up new holding companies so that regulators can scrutinise them more closely, an EU discussion paper says, mirroring steps taken by the United States. The European Commission proposed last November that banks headquartered outside the bloc consolidate their EU activities under an “intermediate parent undertaking” or IPU in response to U.S. moves to require foreign banks to set up such companies.

From Bloomberg: Banks already using algorithms to monitor traders are looking to expand surveillance to cover more employees in the wake of the Wells Fargo & Co. scandal. Lenders asked International Business Machines Corp. if it were possible to use the technology to also watch retail-banking salespeople, loan officers and other workers, according to Marc Andrews, a manager on the company’s Watson financial services team. Several of the biggest U.S. banks, as well as some regional banks, are testing the software, Andrews said. He declined to name them.

From Reuters: European Union banks facing increasing competition from financial technology firms could find it easier to invest in software under rule changes being discussed with regulators. EU banking rules treat software as a cost rather than an investment, forcing lenders to cover expenditure on digital applications with an equal amount of capital. But with banks threatened by a growing number of cyber attacks and under pressure from nimble new entrants to the sector, regulators are now considering changes.