Abstract. The Second Banking Directive revolutionised the banking industry of Europe by setting new standards under which banks of all Member States could branch into any other Member State. By requiring that the host State recognise home country licensing and supervision of the bank, it enables banks to branch across borders bringing their legal environment with them. However, the Directive reserved certain powers for the host State, the most unsettling of which is the power to apply its own law to the branch when it considers this to be in the “general good” – unsettling because it is not clear how the provision will be interpreted. This article examines four national laws to consider whether their application to a branch bankin that territory should be permitted under the general good clause of the Directive, and it develops a concept by which this consideration may be made. Various preliminary issues are treated, in particular, which country is the home country of a bank, and when is a bank a branch deserving of mutual recognition under the Directive.
European Review of Private Law