City of London’s lead lead bar as Brexit deal hops fade

In just a week, the City of London is coming to a dire realization about its Brexit future: a financial services agreement with the European Union may do little to save the situation.

Negotiations are set to close soon to set the framework for regulatory co-operation between Britain and the European Union, as the industry was largely sidelined in the trade deal, which led the UK from the EU on 31 December Marked the division of. A March deadline has been set. And details so far – including discussions – are rare.

The early days of Brexit had bare the stakes: London lost losses of 6.3 billion euros ($ 7.7 billion) in daily stock trades at EU locations on 4 January, the first trading day since the transition period. The overnight loss added incentives to call in by policymakers and the London Stock Exchange to help ease regulations and give the city a competitive edge over European rivals.

A move emerged over the weekend, with the UK Treasury stating that it was Allow trading in Swiss shares, overturn EU ban on activity. Ability to offer business in companies like London Nestle SA and Roche Holding AG will help compensate for losses in EU shares. But the stance also deepens Britain’s division with the European Union, reducing the possibility of offering market access.

Those negotiations – centered around the principle called “equivalence” – are open-ended, without a time limit governing the trade deal. There has been little progress in most areas.

European authorities have little incentive to pull out of an agreement while the financial centers from Paris to Amsterdam win business at London’s expense. Bank of England Governor Andrew Bailey sounded a derogatory remark last week, stating that the block should not reach Brussels’ set standards.

Dramatically, the loss of EU shares is yet to have any impact on the tax generated by trade in the UK, which was over £ 3 billion last year. But it was an immediate warning of the potential costs of Brexit. In total, Square Mile levied a tax of around £ 75 billion in 2019, including employment taxes, According to the City of London Corporation.

“EU share trading is gone, it will not return,” said David Howson, president of COBE Europe, the largest venue for EU shares in London. The firm has seen about 95% of this business move, Howson said on Bloomberg television on Thursday.

How ‘Equivalence’ is key to post-Brexit banking: Quicktake

Bankers and asset managers said the week was otherwise largely disruption-free. This was due to years of preparation by firms, some of which were involved in ongoing business – though initially feared less – outside the UK

Firms such as JPMorgan Chase & Co. and Goldman Sachs Group Inc. have already transferred scores of jobs and hundreds of billions of dollars of assets, while for asset manager clients including Janus Henderson Group plc and Standard Life Aberdeen plc in Luxembourg and Ireland Using the funds. Inside the block.

Nevertheless, that firms grieved indefinitely with the costs and complexity of subsidiary operations in both London and the European Union. Others, such as Hargreaves Lansdowne PLC, have decided to discontinue marketing to European customers.


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