Monday

26th Aug 2019

London firms seek free trade after Brexit

  • Financial firms want certainty on "passporting" rights after Brexit. (Photo: Universiteitskrant Univers)

London's leading businesses are proposing a free trade deal on financial services after Brexit, including a dispute settlement body to secure the City's leading role in finance.

A report launched on Tuesday (26 September) by the the International Regulatory Strategy Group, made up of City experts and sponsored by the City of London and TheCityUK, outlines mutual market access in financial services after Brexit.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

This would make it possible, the report argues, to allow UK financial services firms to operate inside the EU, and for European financial services firms to operate inside the UK without restrictions.

The so-called "passporting" rights, which currently allow UK financial firms to trade freely in the single market, will be lost when Britain leaves the EU. City firms want to avoid tariffs, taxes or quotas after Brexit.

Some banks are considering moving their bases to the continent, risking London losing its leading global role in financial services.

Talking to journalists on Monday, Mark Hoban, the chair of the ISRG council and former City minister, warned that it should not be assumed that European financial centres will automatically benefit from firms leaving London, as Singapore and New York might be just as attractive.

"This is a Europe-wide issue, it is about Europe's role in the world," he argued, adding that banks have yet to implement their plans for after Brexit.

Around 13,500 banks, insurers, asset managers and other financial firms use EU passporting rules that allow easy access between Britain and the EU-27.

More firms in Europe are using passporting than UK-based firms, according to Reuters figures.

The ISRG report argues that the free trade deal on financial services should be based on regulatory alignment between the UK and the EU.

The report proposes a forum of regulators that would oversee supervision and enforcement, would monitor divergence between EU and UK regulations, and implement new global standards.

It also outlines a dispute resolution body between the UK and the EU, made up of an independent, judicial body where representatives of both parties would be present, overseeing the implementation of the agreement.

After public opposition increased to free trade deals, the EU has recently been trying to move from a bilateral dispute settlement mechanisms towards the establishment of a permanent multinational court system.

Mark Hoban argued, however, that for the UK-EU agreement a "bilateral basis would be the best".

Hoban added that the report's proposal is not equal to membership in the single market, something the EU-27 want to avoid as the UK leaves the bloc and the internal market.

"It gives a high degree of access, but does not guarantee access," he said.

Meanwhile, Reuters reported that Britain's financial watchdog has not had any applications - as yet - for licences from EU financial firms operating in the UK, some of which may lose the right to "passport" their services into the country after Brexit.

"We haven't had any yet. I would say this is still talks about talks in some ways," Financial Conduct Authority chief executive Andrew Bailey was quoted by Reuters as saying.

Around 8,000 firms are using "inbound" passports issued by the EU-27 to allow them to do business in Britain or elsewhere, and about 5,500 firms are using "outbound" passporting - issued by UK regulators.

Bailey said the number of passports rose over the last year.

Barnier: UK risks undermining trust in Brexit talks

A day before UK PM Theresa May sets out her Brexit strategy in Florence, top EU negotiator Michel Barnier told lawmakers in Rome: there can be no transitional deal for the UK without a withdrawal agreement.

EU hopes for clarity on Brexit payments

May to give first major speech on Brexit since notifying EU that the UK was leaving. Negotiations have stalled, but she could revive them with a financial offer.

Progress made in Brexit talks, but not enough

Fourth round of Brexit talks saw cooperative tone in a shift after May's speech, but there serious differences on financial commitments and EU court remained.

Opinion

Brexit vs Grexit: The six stages of losing to the EU

Theresa May's venture seems very similar to the attempt by Alexis Tsipras in 2015 to persuade Brussels to accept his terms for the bail out - a huge negotiation failure, presented to the public as the best possible deal.

Opinion

How Brexit may harm the new EU parliament

British plans to - maybe - take part in EU elections risk legal chaos in the next European Parliament, which could be resolved only by treaty change - an unlikely prospect.

Stakeholders' Highlights

  1. UNESDAUNESDA reduces added sugars 11.9% between 2015-2017
  2. International Partnership for Human RightsEU-Uzbekistan Human Rights Dialogue: EU to raise key fundamental rights issues
  3. Nordic Council of MinistersNo evidence that social media are harmful to young people
  4. Nordic Council of MinistersCanada to host the joint Nordic cultural initiative 2021
  5. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  6. Nordic Council of MinistersEducation gets refugees into work
  7. Counter BalanceSign the petition to help reform the EU’s Bank
  8. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  9. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  10. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  11. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat
  12. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North

Latest News

  1. Western leaders disagree on Russia, Iran, and Brazil
  2. Belgium: Parties clash on Reynders as EU commissioner
  3. Spain heading for yet another general election
  4. EU to discuss Brazil beef ban over Amazon fires
  5. 'Our house is burning,' Macron says on Amazon fires
  6. What happens when trafficking survivors get home
  7. EU states and Russia clash on truth of WW2 pact
  8. EU considers new rules on facial recognition

Stakeholders' Highlights

  1. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  2. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody
  3. Platform for Peace and JusticeMEP Kati Piri: “Our red line on Turkey has been crossed”
  4. UNICEF2018 deadliest year yet for children in Syria as war enters 9th year
  5. Nordic Council of MinistersNordic commitment to driving global gender equality
  6. International Partnership for Human RightsMeet your defender: Rasul Jafarov leading human rights defender from Azerbaijan
  7. UNICEFUNICEF Hosts MEPs in Jordan Ahead of Brussels Conference on the Future of Syria
  8. Nordic Council of MinistersNordic talks on parental leave at the UN
  9. International Partnership for Human RightsTrial of Chechen prisoner of conscience and human rights activist Oyub Titiev continues.
  10. Nordic Council of MinistersNordic food policy inspires India to be a sustainable superpower
  11. Nordic Council of MinistersMilestone for Nordic-Baltic e-ID
  12. Counter BalanceEU bank urged to free itself from fossil fuels and take climate leadership

Join EUobserver

Support quality EU news

Join us