Photo: Reshef Mashraky
UK financial institutions are seeking full access to both the UK and EU financial industries without requiring a license.
Since the Brexit vote that shocked financial markets, there have been numerous discussions regarding the landscape of the UK’s post-Brexit financial industry.
UK Prime Minister Theresa May has been an advocate of mirroring a deal similar to those made between the EU and other countries, reiterating today that the UK is adamant on including financial services in any future agreement. However, recent indications from the City of London appear to indicate a lack of satisfaction with the PM’s agenda.
Financial Services Remain Biggest Obstacle
The Brexit saga appears to be getting more complex, as the deadlines to reach a deal are steadily approaching. A recent proposal for an agreement has been crafted by the city of London, in which it was suggested that firms would be able to “operate in both jurisdictions” (UK and EU), without having to obtain a local license.
The proposal takes the agenda of the UK beyond the current aspirations of Prime Minister Theresa May, who continues to bring up current agreements between the EU and other countries, as a blueprint for a future agreement with the UK. According to Bloomberg, Theresa May recently addressed the Brexit negotiation process, saying: “The EU has included financial services, to varying degrees, in quite a number of the trade agreements that they have already established with other countries.”
However, Theresa May’s agenda may not be enough to satisfy her home base, who could classify her negotiations as weak, against EU Chief Brexit Negotiator, Michel Barnier. Canada has been frequently mentioned as a basis for comparison, for a looming UK-EU agreement. However, while Canada’s agreement does provide EU financial services access for Canadian banks, they must first acquire a local license in order to conduct business in the region.
It has become clear that the financial industry in the UK is seeking a more liberal agreement than that of Canada, due in part to the strong linkage that the sides have endured since the establishment of the EU.
The topic of financial services has lingered atop the list of crucial topics in the post-Brexit negotiation process. The issue has caused a stalemate, which has slowed the progress of talks, due to the ramifications for the UK financial industry.
Banks Prepare for Post-Brexit Environment
Many banks have already relocated their EU headquarters to alternative markets in the region, ahead of the looming Brexit.
The moves have been manifested, as a measure to prepare for next year’s designated detachment. Some banks have chosen Frankfurt as a natural landing spot, while others have opted for Paris, Dublin, Amsterdam, and Luxembourg.
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