The U.K.’s request for the European Union to expand its financial market access after Brexit isn’t going to be met in the near future.
Reuters, citing Levin Holle, director general of financial markets policy in Germany’s finance ministry, reported that request won’t be met any time soon. The U.K. wants its access to the EU’s financial market to be based on a broader version of the “equivalence” regime, which gives countries with regulations that are aligned with the EU access. It’s a system that banks in the U.S., Japan and Singapore use to offer some services to EU customers without the need to set up a unit in an EU country. Reuters noted the system doesn’t cover banking activities such as lending and asset management.
“Expanding equivalence regimes to other areas, for example, banking, seems less likely in the short term, since this would touch fundamental questions of EU supervision of these regulated activities on the one hand and national preferences of member states on the other,” Holle told Eurofi magazine. He said it could take the EU until 2020 to decide on the request — that year marks the end of a transition period in which the U.K. still follows EU rules.
As part of the Brexit transition deal, Britain is set to pay the EU between 35 billion and 39 billion euros (US$41 billion – US$46 billion) over the coming decades. The country is due to leave the bloc in March of 2019. But Brexit Secretary Dominic Raab told members of Britain’s upper house of Parliament on Wednesday (Aug. 29) that not all of the payments were a legal obligation, and that the country could actually delay sending funds without a deal. “I don’t think it could be safely assumed on anyone’s side that the financial settlement that has been agreed [on] as part of the withdrawal bill would then just be paid, in precisely the same shape or speed or rate, if there was no deal,” he said.