Regulators in the UK and the EU should co-operate to maintain post-Brexit cross-border trading in financial services as part of a deal that goes beyond regulatory equivalence, an advisory body has proposed.
The International Regulatory Strategy Group (IRSG), which is supported by TheCityUK trade body and the City of London Corporation, has said that an agreement on reciprocal market access for financial and professional services would allow British financial firms to continue to access EU markets and prevent a potential cliff-edge end to cross-border trading.
The model would be based on mutual recognition of each other’s regulatory and supervisory regimes, enabling firms based in the UK to continue trading services across the EU and vice versa, with minimal disruption to their customers.
Mark Hoban, chairman of the IRSG, said: “To minimise disruption and unnecessary cost for customers, the financial and professional services sector has been calling for a bespoke agreement to support the freest possible trade between the UK and the EU post-Brexit.
“There are no easy solutions here but if the goal is to avoid fragmentation and maintain deep and liquid financial markets which benefit customers, then the UK and the EU will need to work together constructively to strike the right deal.”
Last week Bank of England governor Mark Carney made a speech in which he said that the UK could either opt for a Brexit deal that promoted global trading or a closed option that would restrain cross-border financial services.
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