The EU is in “no rush” to grant the City of London renewed access to its financial markets post-Brexit, according to a senior Brussels official.
Mairead McGuinness, the European Commissioner for financial services, said today that Brussels will “not be recreating access to the single market for the UK as they have chosen to move out”.
The UK’s financial services sector lost its wide-ranging access to EU markets when the Brexit transition period ended on 31 December.
The only way the City of London can maintain its pre-Brexit access to the EU is if Brussels unilaterally grants regulatory equivalence, however the bloc believes the UK is destined to diverge from its financial services regulations and has withheld the designation.
Speaking to an event held by the European Securities and Markets Authority (ESMA), McGuinness said: “I know there probably is an appetite on the UK side for us to sit down and get going.
“We are certainly very keen to do that, but we’re not under pressure to do it.”
“There won’t be a moment, as there was with the trade agreement, where we are sitting down and announcing a big package. I see it more on a case-by-case basis,” she added.
“While there may be one or two issues there might be pressure points, there isn’t that great urgency, which allows us time to do the right thing and I think that is understood on the UK side.”
Bailey: City of London won’t be a rule taker
Bank of England governor Andrew Bailey recently said equivalence was the best case scenario for the financial services sector, but that it wouldn’t be worth it if the UK had to be a regulatory rule taker.
Lord Jonathan Hill recently unveiled a review for the government that called for a change the UK’s share listing regime and for regulators to allow Special Purpose Acquisition Companies (Spacs) to list in London in a bid to maintain the City’s global competitiveness.
Changes like this would not be possible if the UK were to stick to EU rules and try to gain equivalence.
Bailey said the UK must not become a mere “taker” of EU rules in return for access.
“If the price of this is too high then we can’t just go for it whatever,” he said.
The City of London exported £25bn of services to the EU in 2019, which is almost half the total amount of financial services exported by the UK that year.
A large amount of share trading has left London and gone to the Netherlands since the UK left the EU single market and customs union on 31 December.