LONDON (Reuters) – The United Kingdom is assured that it’s on the verge of reaching an settlement with the European Union to offer London’s huge monetary centre entry to EU markets after Brexit, Britain’s monetary providers minister John Glen mentioned on Monday.
A Thames Clipper sails alongside the river previous the Canary Wharf monetary district in London, Britain, November 6, 2017. REUTERS/Mary Turner
Home to the world’s highest variety of banks and largest business insurance coverage market, the City of London and its sister district in Canary Wharf are scrambling to arrange for Britain’s departure from the European Union, the largest problem the UK monetary sector has confronted for the reason that 2007-2009 monetary disaster.
Britain’s monetary providers sector, the largest supply of its exports and tax income, has been struggling to discover a solution to protect the prevailing circulation of buying and selling after it leaves the EU.
The government is on the lookout for an improved type of the EU’s present system of economic market entry referred to as ‘equivalence’ – a primary type of market entry depending on guidelines being stored broadly comparable and the premise for the EU’s relationship with international locations such because the United States.
“I am extremely confident we will reach an imminent deal,” Glen advised a monetary providers conference in London. “There is common ground. That is why we are increasingly positive on the expectation of reaching a deal.”
Talks over a broader deal are mired in a disagreement over an Irish “backstop” – an insurance coverage coverage to make sure there can be no return to a tough border on the island of Ireland if a future buying and selling relationship shouldn’t be in place in time.
But negotiators are near agreeing wording on monetary providers that will go right into a declaration on future relations, which be included alongside any divorce deal, in accordance with British officers.
Glen mentioned EU politicians are more and more fearful about being reduce off from Britain’s monetary markets as a result of all the opposite monetary centres in Europe are smaller in measurement.
“Severing connections to our financial centre is not in the commercial interests of any other European capital. It’s fair to say the overwhelming majority of European politicians share the same view,” he mentioned.
NO APOCALYPSE NOW
Glen additionally advised the City & Financial conference mentioned that dire warnings on lots of of 1000’s of jobs leaving the City as banks and insurers open new hubs within the bloc forward of Brexit subsequent March have not materialised.
“The job losses have not been at the apocalyptic proportions predicted by scaremongerers,” Glen mentioned.
James Bardrick, who heads Citigroup’s UK operation, mentioned he’ll proceed planning for a tough Brexit till Britain agrees a deal.
“We have largely done that. We have the arrangements in place that would allow us to continue serving our customers,” Bardrick advised the conference.
Britain has accomplished all that it will possibly to keep away from disruption to monetary markets if there’s a no-deal Brexit subsequent March, Nausicaa Delfas, the manager director chargeable for worldwide points at Britain’s Financial Conduct Authority, advised Reuters on the sidelines of the conference.
While the EU has signalled it might take motion to keep away from disruption in derivatives clearing, the bloc wanted to do extra in case of no-deal Brexit, reminiscent of guaranteeing monetary information might proceed to circulation throughout the Channel, she mentioned.
She desires a memorandum of understanding between UK and EU regulators in place “as soon as possible” in order that asset managers in London and Edinburgh can proceed to function funds listed within the bloc, a cross-border regime recognized globally as delegation.
“To the asset managers in the room, I want to reassure you that the burning issue of portfolio delegation will be resolved,” Glen added.
Financial providers no-deal Brexit plans drawn up by the bloc present a reluctance to take care of different areas of potential disruption, reminiscent of continuity in insurance coverage contracts and privately-traded swaps agreements.
Delfas mentioned it was as much as the EU what measures it might take, however that nationwide regulators in member states might take motion themselves to keep away from disruption in contracts like insurance coverage insurance policies.
Stephen Jones, head of Britain’s banking foyer UK Finance mentioned he was “sceptical” a few monetary providers deal, saying the precise framework would hinge on broader EU-UK commerce negotiations that have but to start out in earnest.
Reporting by Huw Jones and Andrew MacAskill; Editing by Raissa Kasolowsky and Peter Graff