21 January 2021

FT: EU ‘not punishing’ UK financial services sector, London envoy insists

Brussels is “not punishing” the City of London by withholding key regulatory rulings that would allow UK financial services firms to serve customers in the EU, the bloc’s ambassador to Britain has claimed. João Vale de Almeida said Brussels was waiting for more information from the UK before deciding whether British financial services regulation should be deemed “equivalent” to the EU’s rules.

Britain has argued that its rules are, by definition, equivalent, given that the UK only left the European single market on January 1. The EU, however, said it wants details of Britain’s future regulatory plans. Mr Vale de Almeida insisted the EU/UK trade deal did offer some help to financial services companies: he said they were free to establish in each other’s territories, so there was “no protectionism”.

Many City firms have set up operations in the EU to carry on serving customers in the single market, in the absence of equivalence rulings that would allow cross-border trade. “There is no punishment,” Mr Vale de Almeida told the Ludgate Lecture organised by Bright Blue, a think-tank. “We are waiting for more elements from the UK.”

The British government has already submitted 2,500 pages of answers to Brussels about its regulations covering banks, insurers and other financial firms. Allies of prime minister Boris Johnson believe the EU is trying to make the City wait nervously, hoping to lure more jobs and capital to other European financial centres, including Paris. Both sides are aiming to agree a memorandum of understanding by March on regulatory co-operation, but that does not guarantee that Brussels will grant equivalence rulings. Mr Vale de Almeida said he hoped Britain and the EU would forge a strong commercial, security and diplomatic partnership in the years ahead, declaring: “There is life beyond Brexit.”...

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