Top City watchdog: EU has no excuse for leaving financial services out of a Brexit trade deal

Catherine Neilan
Follow Catherine
Inside The City Of London's New Landmark Skyscraper
Michel Barnier recently said financial services will not be included in any deal (Source: Getty)

The City’s top financial watchdog has said there is no reason why financial services should be excluded from a post-Brexit free trade agreement between the UK and the EU.

Andrew Bailey said the EU has already attempted to strike trade deals that would include financial services, such as the ailing Transatlantic Trade and Investment Partnership (TTIP).

"In the approach the EU took to the TTIP negotiations with the US... the EU pursued a trade agreement which included provision for financial services," Bailey, who heads up the Financial Conduct Authority, said.

"The US wasn’t ready for such a move, but this doesn’t take away from the fact that to its credit, the EU proposed such an arrangement."

The EU's top Brexit negotiator, Michel Barnier recently said financial services will not be included in any deal.

But Bailey hit back on Monday: “If as a response to Brexit the EU wishes to change the status quo, it would amount to a decision to close market access, not a decision about whether to open it. It would also be a decision to disconnect the EU from the benefits of global markets.”

Read more: Davis pledges to "work intensively" with Barnier on Brexit transition

At a Future of the City dinner, Bailey that under EU proposals TTIP would have resulted in “close regulatory co-operation which could underpin broad mutual recognition and thus a commitment to ensuring open markets”.

Bailey added: “So, it turns out that it can be done, and moreover there is an extant proposal from the EU which could be a good starting point for UK-EU mutual recognition.

TTIP has been on hold since Donald Trump took office, with the US President prioritising his so-called "America First" stance ahead of trade liberalisation.

Responding to Monday night's speech, Miles Celic, head of lobby group TheCityUK, said: "Andrew Bailey is absolutely right to underline the importance of a Brexit deal with mutual regulatory recognition at its heart.

"His ‘can do’ approach to how this could work in practice underlines the foresight and agility with which British regulators have approached this challenge. We look forward to a similar commitment of cooperation from European counterparts on this matter."

Read more: The City will remain the world's financial hub

Related articles