The fact that there are more companies relying on passporting to do business in the UK than the other way round could boost the case that the EU has as much to lose from restricting UK access to the single market.
The UK accounts for 40 per cent of Europe’s assets under management and 60 per cent of its capital markets business, according to a recent report for the British Bankers’ Association by the law firm Clifford Chance and the consultants Global Counsel that has been seen by the Financial Times.
“The introduction of new regulatory barriers to business in markets that have up to now operated as a single market will increase costs, raise barriers to entry and reduce customer choice,” the BBA report said, adding that UK-based banks provided more than £1.1tn of loans to the EU.
Most big US, Japanese and Swiss banks use London as their hub for passporting into other EU markets. Since the Brexit vote in June they have been drawing up contingency plans for moving some business out of the UK if passporting goes.
“The business put at risk could be significant,” said Andrew Tyrie, the MP who chairs parliament’s Treasury select committee, which published the figures from the Financial Conduct Authority.
“None of the current off-the-shelf arrangements can preserve existing passporting arrangements, while giving the UK the influence and control it needs over financial services regulation as it develops,” said Mr Tyrie. [...]
The total number of passports held by UK companies amounted to 336,421 because many have passports for different sectors in different countries, the FCA said. The total number of passports held by European businesses for access to the UK is 23,532. [...]
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Andrew Bailey's letter to Andrew Tyrie
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