Britain says it won't seek EU access for City of London at 'any cost'



© Reuters. FILE PHOTO: HSBC’s building in Canary Wharf is seen behind a City of London sign outside Billingsgate Market in London, Britain, August 8, 2018. REUTERS/Hannah McKay

LONDON (Reuters) – It would be wrong for Britain to seek access for the City of London to the European Union’s markets at “any cost” if it made tailoring rules harder, the Financial Conduct Authority said on Thursday.

Britain left the EU’s orbit on Dec. 31 and its trade deal with the bloc does not cover financial services, leaving the City largely cut off.

The EU is assessing direct financial market access for Britain under its “equivalence” rules. The bloc has said it was in no rush as it wants to know how far Britain will diverge in regulation.

FCA CEO Nikhil Rathi said Britain would use its autonomy to regulate for the benefit of UK financial markets and consumers.

Changes to rules inherited from the EU will focus on tailoring them to the “specificities and needs” of UK markets and not simply diverging for the sake of it.

“And, while the likely effect of any changes to the UK’s regulatory regime on equivalence with the EU should and will be considered, it’s not consistent with the FCA’s objectives to target equivalence at any cost, including the opportunity cost of failing to make our markets work better,” Rathi said in a speech to the Association of Foreign Banks.

Separately, Bank of England Governor Andrew Bailey said there needs to be a “very clear difference” between equivalence and so-called location policy.

READ  'Ten years with my insurer meant a £2,000 hike'

Brussels is asking European banks to relocate clearing of euro-denominated derivatives from London to Frankfurt by mid-2022, rather than allowing them to continue clearing in the UK under equivalence.

“Equivalence relates to where your own residents do business, location is the rest of the world. That’s a big step beyond,” Bailey told reporters.

“I don’t think that is in the interests of financial markets, I don’t think it’s in the interest of financial stability,” Bailey said.

Bankers say the EU is unlikely to grant equivalence any time soon and Britain should focus instead on speeding up efforts to make the City more globally attractive.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





READ SOURCE

LEAVE A REPLY

Please enter your comment!
Please enter your name here