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FCA’s Bailey pushes for regulator cooperation over Brexit transition

FCA chief executive Andrew Bailey is calling on regulators to put a memorandum of understanding style agreement in place for the UK’s departure from the EU by March, warning both economies will suffer without one.

Speaking at the Future of the City dinner in London on Monday, Bailey said mutual recognition on regulations would ensure financial services trade continued in a similar fashion after the departure of the UK, which is set to lose its European financial passport without a deal.

Bailey said an agreement would provide “much needed assurance” to firms and markets during Brexit negotiations and prove Britain’s commitment to continued open markets.

FCA names chief operating officer as Brexit head

He said: “An MoU would be a means for the regulators to be transparent in the more practical issues around implementation, and thus that we are committed to such a period of time being available. This is an important safeguard and a sensible way to underpin financial stability.”

“The EU is a regional trade bloc but I don’t believe that it has ever been part of the objective of the EU to pursue regional free trade and global protectionism. Moreover, there is an extant proposal from the EU which could be a good starting point for UK-EU mutual recognition.”

FCA expecting passporting to continue post-Brexit

Bailey again stressed the benefits of the potential deal for the EU, and said central counter-party clearing houses could find themselves in breach of regulation, while the personal data of EU citizens held in the UK was also a factor to consider.

He said: “Like all systems, the UK financial system is exposed to risks. Given its size, complexity, and global interconnectedness if these risks were to materialise they could have a major impact not only on the UK but also on the global financial system.  Financial stability in the UK is thus a global public good.”

“Fragmentation of financial markets is not a price worth paying, for either side.”

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. Is Theresa May likely to be remotely interested in trying to make room on her already very crowded plate for the opinions of someone parachuted in by the Treasury with a view to sorting out a chronically dysfunctional quango? Mr Bailey should stick to his knitting.

    Prudential’s house view, expressed last year at a seminar I attended, is that when all the talking and arguing is done, the end result is going to be a hard Brexit. It won’t be great but it’ll probably be better than disengaging from the EU on paper only.

  2. There is no hard or soft Brexit. Brexit is OUT of the corrupt EU. Ask any Swiss person, they are glad not to be fully in and they have a great standard of living too. Mother Teresa is a disgrace to the people of this country who voted out. The politicians are not listening to the people again!

    • The Swiss are signed up to free movement of people and have no choice if they want to sell their watches to the rest of us. They have to accept the rules of the single market but with no say over them.

  3. If the Pru told me tomorrow is Wednesday, I’d take a second opinion.

    The UK is slipping further and further behind. The PMI survey shows a sharp slowdown in growth. As we try to go it alone the EU is forging ahead. Boris and Rees-Mugg will probably be correct in that we will end up as a vassal state.

    With the vacuum in the US, the EU has taken up the baton with trade agreements with Canada and China.

    Even the ex MI6 chief has said that our loss of influence will be profound. Indeed not only leading economists, but the CBI, IOD, most major business leaders, The City, the BoE and now the Prudential Regulation Authority and a majority in the Commons, not to mention the latest impact reports – all are in accord that Brexit will be detrimental in one way or another to UK interests.

    Brexiteers like Mugg and Bojo can sit in cinemas and drool over times gone by watching the Darkest Hour. We can only hope that somewhere in Government circles someone will begin to accept that the world has changed and we are in the 21st Century. From 1945 to 1979 the UK was in steady decline. Our EU membership combined with the Thatcher years reversed that and we had a period of relative resurgence until about 2015. I just hope that our graph doesn’t head downwards again as seems likely. We have two hopeless political parties containing absolute buffoons, perhaps this debacle will remodel UK politics – it can hardly get worse.

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