LONDON – The UK and the European Union have yet to find a solution for the post-Brexit financial services industry, and recent data suggests Brussels may be in control of the negotiations.
It has been a key topic of debate following the UK’s vote to leave the European Union in 2016. The city of London, the UK’s business district, wants access to the European market as it represents an important part of its activities. . On the other hand, the city is also a vital source of funding for European companies.
However, Brexit has inevitably changed that relationship. Upon leaving the EU, the UK has lost access to the free flow of EU people, goods and services and this affects the functioning of financial services.
European financial centers, London’s rivals, have benefited in the weeks following the UK’s end to EU rules on 31 December. The Dutch capital Amsterdam, for example, has seen an increase in the number of operations it reserves. Some euro-dominated financial products have also been completed outside London.
“The shift in trading of EU-listed stock shares from the UK to the Netherlands was certainly unprecedented in its size and the fact that it all happened overnight on January 4. But it didn’t be unpredictable, “CBOE Europe President David Howson of pan-European stock exchange told CNBC’s” Squawk Box Europe “on Wednesday.
The EU and the UK agreed to work on their financial services relationship in early 2021. However, there is a widespread view that Europe will not recognize UK rules as equivalent to its own, which would restrict the ability of UK-based companies to trade more freely on the blog.
“I don’t see any likelihood of an equivalence agreement,” Howson said.
“There is certainly no incentive for the European Commission and ESMA (European Securities and Markets Authority) to seek to provide equivalence given the share of trading that has now moved, as we said, almost permanently to Europe. “, added.
Bank of England Governor Andrew Bailey said earlier this month that it would be a “mistake” if the EU decided to block the city of London in some way.
“The EU has argued that it needs to better understand how the UK intends to amend or amend the rules set out below. This is a rule that the EU has no other country,” Bailey said in a statement.
However, the EU argues that without understanding how the UK will proceed with financial regulation, it will not be able to recognize them as equivalent to its own.