City of London divided over Brexit



City of London: EU and UK Brexit negotiators agree financial services deal

  • UK and EU have agreed on a "tentative" deal for financial services, securing the post-Brexit future of the City of London, The Times reports.
  • The deal is set to be based on the principle of equivalence.
  • Equivalence is a framework whereby the EU acknowledges that the legal, regulatory, and supervisory regime of a non-EU country is as good as its own.
  • Pound jumps more than 1% on news of the agreement.

UK and EU negotiators have secured a deal on the future relationship for financial services firms operating in the two jurisdictions after Brexit, The Times newspaper reported on Thursday.

Citing UK government sources, the Times reports that the two sides have struck a "tentative" deal that will allow the UK "continued access to European markets" once Britain has left the EU.

Securing a deal for financial services has been seen as one of the most difficult parts of Brexit talks because of the highly international, highly regulated nature of the industry. Britain currently relies on a system of so-called "passporting," but will likely need a new framework for its relationship after Brexit.

Passporting rules allow EU finance companies to sell their services across the 28-member bloc with a local license, rather than getting a license to operate in each member country where it does business. Its use is tied to membership of the European Single Market. Britain is likely to leave the Single Market as part of Brexit and will no longer be able to do business using these rules once it has left the EU.

Read More:Europe is closing a trading loophole that banks were relying on to cope with Brexit

The Times reports that the new relationship will be based around the principle of equivalence.

Under the equivalence framework, the EU acknowledges that the legal, regulatory, and supervisory regime of a non-EU country is as good as its own and allows that state access to the financial services sector within the bloc. Countries like Singapore and the USA use a similar system to trade financial services with the EU.

The UK government has consistently maintained that it will seek to improve on existing requirements for equivalence of rules between the EU and outside countries.

The EU was initially sceptical of these plans— claiming it did not allow the bloc complete autonomy — but has softened in recent months, and now appears to have conceded that this system is the best way forward.

Under the proposed system, The Times says equivalence rules will be tweaked, meaning that current system, whereby "market access can be withdrawn unilaterally with only a month's notice" will be removed, with the time period extended, and the enforcement of the equivalence principles falling under the governance of the main EU-UK trade deal.

Senior EU officials, however, poured water on reports of a breakthrough, with chief negotiator Michel Barnier describing media reports on the subject "misleading."

"Misleading press articles today on #Brexit & financial services. Reminder: EU may grant and withdraw equivalence in some financial services autonomously. As with other 3rd countries, EU ready to have close regulatory dialogue with UK in full respect for autonomy of both parties," he tweeted.

The pound has responded well to the reports of a deal for the City, with the UK's currency jumping more than 1.1% in early morning trade on Thursday. By just after 8.45 a.m. GMT (4.45 a.m. ET) the pound is trading at 1.2908 against the dollar, as the chart below shows:

Markets Insider

Our Brexit Insider Facebook group is the best place for up-to-date news and analysis about Britain's departure from the EU, direct from Business Insider's political reporters.






Video: Roundtable: Has Brexit put the City of London at risk?

City of London: EU and UK Brexit negotiators agree financial services deal
City of London: EU and UK Brexit negotiators agree financial services deal images

2019 year
2019 year - City of London: EU and UK Brexit negotiators agree financial services deal pictures

City of London: EU and UK Brexit negotiators agree financial services deal recommend
City of London: EU and UK Brexit negotiators agree financial services deal forecasting photo

City of London: EU and UK Brexit negotiators agree financial services deal images
City of London: EU and UK Brexit negotiators agree financial services deal pics

City of London: EU and UK Brexit negotiators agree financial services deal City of London: EU and UK Brexit negotiators agree financial services deal new foto
City of London: EU and UK Brexit negotiators agree financial services deal new foto

photo City of London: EU and UK Brexit negotiators agree financial services deal
picture City of London: EU and UK Brexit negotiators agree financial services deal

Watch City of London: EU and UK Brexit negotiators agree financial services deal video
Watch City of London: EU and UK Brexit negotiators agree financial services deal video

Forum on this topic: City of London: EU and UK Brexit , city-of-london-eu-and-uk-brexit/
Discussion on this topic: City of London: EU and UK Brexit , city-of-london-eu-and-uk-brexit/ , city-of-london-eu-and-uk-brexit/

Related News


Now Playing: The only piece of advice Anil Kapoor ever gave Harsh
Laughter is the best medicine
The Stars of Bravos Girlfriends Guide to Divorce Spill on the New Season
Haircuts With Bangs Can Take A Fresh Look At Your Style
9 Of The Worlds Cheapest Countries To Visit
How to Survive Family Holidays As a Vegetarian
Keep IBD at Bay, One Checkup at a Time
10 Scary Side Effects of Healthy Habits
Something blue’ Wedding Day Jewelry
How to Lessen a Double Chin
The Perfect Stemless Wine Glasses For Your Next Summer Party



Date: 15.12.2018, 11:16 / Views: 92445