16 January 2016, London: Parker Fitzgerald (PFG), the specialist risk consultancy, has responded to reports that TheCityUK has dropped its demand for continued access to the single market, instead deciding to champion a deal based on ‘equivalence’.
Dr Colin Lawrence, Strategic Regulation Advisor and Member of the PFG Advisory Board said:
“This principle of equivalence is already well established to the City of London’s benefit. The technical apparatus of equivalence and cross border resolution regimes already exist. The UK has been the driving force behind many elements of European regulations whilst a significant proportion of EU financial services law has been modelled on the UK’s regulatory system. It is unlikely that the UK could substantially deviate from the initiatives that are already finalised or underway.
“Post Brexit, the regulatory obstacles preventing Single Market access for UK-based financial institutions (and vice versa) are relatively straightforward and can be overcome. The relationship between the central banks will be pivotal in making this work. In practice, however, the likelihood of a satisfactory outcome will depend on a number of political factors, including the actions of the key political figures throughout the negotiation process and how the competing priorities of the EU institutions and member state governments are managed. There are many risks and many unknowns.
“Arguably this biggest factor is the position and sentiment of EU institutions and key member states in how they should negotiate with the UK. There is some hostility towards the UK and there could be overt attempts to weaken the City of London and encourage UK banks and financial companies to relocate inside the Eurozone. Equally, however, there are signs of pragmatism beginning to drive the agenda.”