Theresa May has defended her decision to rule out the ‘passporting’ rights for banks after Brexit by stating that Britain shouldn’t become a “rule-taker” in regard to its financial services.
In an interview with the BBC, the prime minister stated: “Given the importance of financial stability, of ensuring the City of London, we can’t just take the same rules without any say in them.”
May highlighted that the financial sector plays such a vital role in the British economy that Brussels should not be able to keep control over it through the existing arrangement currently in place.
According to May, Britain shouldn’t have to abide by the rules outlined for the rest of the EU, but instead, set its own rules to follow. Hopes had previously been raised that a bespoke deal for financial services with the EU could be possible, indicating the potential for growth and success. However, accusations from EU officials say that Britain can’t just pick and choose the best bits of the EU rules and regulations. Britain must come to terms with the fact that they will have less access to the single market, particularly if they continue to resist taking up any of the conditions outlined for alternative member countries. The outcome is yet to be determined, but the prime minister is still hopeful that the result will be positive for the financial sector and meets the objectives of both sides.
“One of the elements that we will be looking at as part of our future economy partnership with the European Union is a partnership on financial services. The role that the City of London here plays is not just important for us; it’s important for the whole of the European Union…”
However, this comes at a time when the EU is finalising proposals that could give regulators more power in the sector, including raiding the financial firms in Britain during transitional periods. The city minister has hit out at such proposals by Brussels which could result in London experiencing more red tape after Brexit.
The Confederation of British Industry lobby group has highlighted the importance of ensuring that alternative arrangements are put in place to stop firms wanting to leave the city should the results be less than favourable.
What is clearly evident from recent Brexit movements is that this year will be crucial – not only for securing an outcome of negotiations but understanding its impact on the financial sector.
For more information on navigating professional services procurement during this transitional period for Britain, get in touch with our specialists today!
Article by: Harvinder Rattan