SKN | EBA Redefines the Banking Perimeter: What HNWIs Need to Know About the New €30 Billion Threshold

Key Takeaways:

• The EBA is proposing clearer rules for when large investment firms must be reclassified as credit institutions, with the €30 billion total-assets threshold becoming a critical regulatory dividing line.
• For HNWIs, the change matters because a firm’s regulatory status can influence counterparty risk, capital requirements, governance standards and the resilience of services connected to a broader wealth structure.
• Clients using investment firms, private funds or sophisticated financing arrangements should review whether their counterparties could fall into a different regulatory category as the framework evolves.
• Swiss private banking structures should remain diversified across institutions and jurisdictions rather than relying solely on a counterparty’s current regulatory classification.

The European banking landscape is entering another phase of regulatory refinement, and the latest move by the European Banking Authority is particularly relevant for sophisticated investors. The EBA has proposed revised technical standards governing when large investment firms must be reclassified and authorised as credit institutions, using a €30 billion total-assets threshold as a central reference point. While this is primarily an institutional regulatory issue, its implications reach directly into the world of private wealth: counterparty strength, capital requirements, liquidity access and the reliability of financial infrastructure all matter when substantial family wealth is distributed across multiple institutions.

Why the €30 Billion Boundary Matters

The proposed framework seeks to establish greater consistency around the point at which a large investment firm effectively crosses into the regulatory territory traditionally associated with banking. The EBA is addressing three practical areas: how assets are calculated against the threshold, how firms notify supervisors and when authorities may grant a waiver.

For wealthy clients, the significance is not simply whether a firm is labelled a bank. Regulatory classification determines the supervisory architecture surrounding an institution. As a firm grows in scale and financial interconnectedness, regulators may require a stronger framework for capital, governance, risk management and resilience.

Reassess Counterparty Risk Beyond the Brand Name

HNWI portfolios frequently involve relationships with institutions that sit outside conventional private banking. Investment firms may provide execution, structured financing, derivatives, custody or access to private-market opportunities. A family office may also maintain relationships with specialist lenders or asset managers.

The regulatory perimeter therefore becomes part of counterparty analysis. A prestigious name does not automatically eliminate structural risk. The more useful question is how an institution is capitalised, supervised and connected to the wider financial system.

For Swiss-based wealth structures, this distinction is especially important. Zurich and Geneva private banks routinely coordinate with international custodians, investment managers and financing institutions. A regulatory change affecting one part of that network can influence onboarding requirements, collateral arrangements, reporting procedures or the availability of certain services.

Use Regulatory Change as a Portfolio Stress Test

Rather than waiting for new rules to become final, sophisticated wealth owners should use the consultation period as an opportunity to conduct a counterparty review. Identify every institution providing custody, financing, investment execution or liquidity services and establish its current regulatory status, ownership structure and principal jurisdiction of supervision.

The review should also examine concentration. If one institution provides custody, lending, foreign-exchange services and structured financing simultaneously, the operational dependence may be greater than the portfolio statement suggests. Diversification should therefore be considered not only by asset class, but also by financial infrastructure.

Swiss Banking Relationships Still Require a Wider View

Swiss private banking remains valuable precisely because clients can combine sophisticated custody, financing, wealth planning and cross-border expertise within a highly regulated environment. Yet even the strongest private-bank relationship operates within a broader international financial ecosystem.

For globally mobile families, the objective should be to build a structure capable of absorbing regulatory change without forcing an immediate restructuring of core assets. This means maintaining current documentation, understanding beneficial ownership across entities and ensuring that alternative banking and custody arrangements can be activated when circumstances require them.

The Strategic Implication for HNWIs

The EBA’s proposed changes reinforce a broader trend: regulators are increasingly focused on the boundary between traditional banking and the expanding investment-firm ecosystem. As financial institutions grow larger and perform functions historically associated with banks, supervisory expectations are evolving with them.

For HNWIs, the lesson is straightforward. Regulatory status should be treated as one component of counterparty due diligence rather than a box-ticking exercise. The stronger strategy is to understand where capital is held, who controls the institution, which regulator oversees it and how easily the relationship could adapt if the regulatory framework changes.

In private wealth management, resilience is rarely created by one institution. It is created by a carefully coordinated architecture in which custody, liquidity, financing and governance remain robust even when individual counterparties or regulatory classifications change.

For a confidential discussion regarding your cross-border banking structure, counterparty exposure and long-term wealth architecture, contact our senior advisory team.