Britain hails new optimism about Brexit deal for financial services

  • Britain hails new optimism about Brexit deal for financial services

Britain hails new optimism about Brexit deal for financial services

The UK has previously declared that once it withdraws from the European Union, it would no longer fall under European Court of Justice jurisdiction, but now Barnier has revealed that the EU will insist on ongoing judicial oversight for the court remain part of any prospective Brexit deal.

"The fog is clearing".

Speaking to City A.M. on the sidelines of the City Week conference, held at London's Guildhall, Dombrovskis said: "We expect close cooperation in the financial sector with the United Kingdom after Brexit - close regulatory and supervisory cooperation".

This is the same treatment given to the U.S. and Singapore but this access is reliant on the EU continuing to approve of the UK's regulatory regime and can be withdrawn at any point - meaning for access to the European market to be maintained, Britain would have to mirror its rules.

But Britain has said equivalence is too one-sided and wants a bespoke trading deal for banks based on mutual recognition or the United Kingdom and European Union accepting each other's rules.

Andrew Bailey, head of the Financial Conduct Authority, told the City on Tuesday that the mutual recognition model that finance firms want was in fact "the opposite" of cherry picking and remains a possibility.

Catherine McGuinness, political leader of the City of London, the historic "Square Mile" financial district, said after Dombrovskis' speech that a mutual recognition deal would be best for Britain and the EU.

The alternative is a one-sided system whereby the bloc grants market access if a foreign country's rules are fully aligned or "equivalent" with its own.

Last December Switzerland's stock exchange was only given temporary equivalence access, angering the Alpine state, whose minister for worldwide finance, Joerg Gasser, cautioned Britain about going down the same road.

Jean-Pierre Mustier, chief executive of Italian bank UniCredit Group which has operations in London, said there is a need to ensure that cross-border financial contracts and flow of data are not disrupted by Brexit, and that there is mutual recognition of rules.

"As Vice President in charge of financial stability, my message is that all parties - firms and supervisors - need to continue their work to prepare for all scenarios", Dombrovskis said.

"European trade in financial services to the City is obviously important. but it is not life and death", Blackwell said.

Some EU policymakers fear that Britain will ease rules for banks in a bid to keep London as a dominant global financial centre after Britain leaves the EU next March.

Glen dismissed talk of a "race to the bottom", a move that would make it much harder for Britain to secure access to the EU's financial market.

British regulators have said banks should be allowed to use the transition period to take more time to implement Brexit plans.