Posted on Jan 12, 2021
The EU is unlikely to grant broad access for the City of London, and the flight of euro share trading from Britain to the bloc will be permanent, according to Conor Lawlor, director for Brexit at UK Finance.
“This is the beginning of market fragmentation... Where do those additional costs begin to land over time?” Lawlor told the House of Commons Treasury Select Committee.
“I don’t see the particular movement of shares that has left the UK returning.”
Last Monday more than €6 billion euros in daily euro share trading in London shifted overnight to platforms in the EU, in the first sign of Brexit’s impact on the City.
The EU unilaterally grants market access if it deems that financial rules in a non-EU country are “equivalent” or aligned sufficiently to those in the bloc.
But Britain wants to diverge significantly from some EU rules and the bloc is also reviewing its regulations, thereby presenting two “moving targets” to make decisions on equivalence a challenge.
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