London finance firms have long waited for the European Union to open its doors

On 4 January a vacant road in the Square Mile Financial District of the City of London.

Photographer: Jason Alden / Bloomberg

The European Union is in no hurry to reopen its doors to the British finance industry, in the hope that the Brexit trade deal will unlock market access for banks and other finance firms.

Officials of the 27-nation bloc insisted on Monday that the European Union would not be hasty in its assessment of Britain’s plans to regulate its financial sector and underlined that granting market access is a unilateral decision not to negotiate .

The industry mostly stayed out of the free-trade agreement that both sides struck at the end of last year. The relationship is now known as a process known as equivalence, where each party gains market access if the other rules are adequately observed. Until this is decided, UK firms will have to rely on bases in Frankfurt, Paris and other cities in the European Union to trade with customers there.

“Equality requires a certain degree of alignment. But that degree of alignment needs to be discussed and agreed upon by the region, “Almora Rubin de Cervin, who is in charge of international relations in the Department of the European Commission for Financial Services, Told a European Parliament committee on Monday. “Equality as a process will take a little time.”

While the UK began life outside the block on 1 January with almost identical rules, authorities are considering changes in several areas. Bank of England Governor Andrew Bailey has said that Britain should not be tied to EU standards as market access is the price to win.

Read more: City of London’s Plight Led Bar as Brexit Deal Hopes Fade

As a first step, the UK and the European Union are working on ground rules for cooperation in financial services by March. But officials in London should not confuse this with talks on market access, warned Rubin de Cervin, realizing that the planned memorandum would not force the European Union to make its own decisions.

If the distance between the two parties is not significant, the deadline to reach an agreement is “definitely achievable”, according to the official. “But if the UK comes to the table of the MOU with excessive demands, for example in case of impediments to decision, then it will take longer.”

Ever since Britain voted to leave, the European Union has drawn a tough line on financial services, ignoring a number of proposals to extend cooperation beyond its standard framework to deal with companies outside the bloc.

“There is no parallel negotiation on financial services. The deal has been done, “France’s Junior Minister of European Affairs Clement Buenne told A Bloomberg TV Interview on Monday. “The European Union has a unilateral framework in its hands. Now we are looking at, this is our analysis on the financial regulations of the UK markets, to see if we think they are sufficiently protective, adequately regulated, on a unilateral, unilateral basis in our market Reach or not. “

The UK lost around 6 billion euros in daily stock trading on the first trading day after the Brexit transition period, encouraging voices that helped ease regulations and give the city a competitive edge over European rivals. One such move came after the UK Treasury said it planned to allow trading in Swiss shares, reversing the EU ban on activity.

The European Union is also reducing changes to its rules, making the assessment of alignment more complex. “To some extent – and this is part of the difficulties going forward – we will be two moving targets,” Rubin de Cervin said.


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