ECB signals greater liquidity requirements for fintech banks
The European Central Bank (ECB) has indicated it may require fintech banks to hold additional capital buffers and greater liquidity when entering the European market. The concern is over the potential unrest these entities could pose to the European banking system. Six banking licenses have been granted to fintech banks in Europe this year. Many European centres are looking to attract fintech entities with the UK's impending exit from the European Union meaning many start-ups are looking for EU-based headquarters. 
“High-tech,” or fintech banks may be required to hold higher capital buffers and larger liquidity when entering Europe, the European Central Bank said in draft licensing guidelines today.

This is to counter some of the risk these banks might bring into already mature financial markets (risks that are somewhat more unique than those presented by traditional banks), the ECB said.

As fintech grows around the globe, and factors such as the Brexit send banks looking for additional headquarters, many European countries are seeking to draw in these new companies.

The ECB has granted six banking licenses for fintechs this year, with another two applications still pending. This license is unnecessary for fintechs who don’t want to assume that traditional duty of banking, collecting deposits.

Aside from bigger capital buffers, fintech banks will also be required to demonstrate “IT competence” to the ECB. Fintech banks could also be asked to come up with a plan to fold themselves down in an “orderly” manner, as reported by the NY Times.

Read more at Reuters and the NY Times.