26 January 2021

FT: City warned EU will do London no favours on financial services

The former minister leading the UK government’s review into the City has warned that Brussels is targeting London’s position as a global financial services centre and has predicted the EU will not grant British-based firms the highly prized access they are seeking to the European market.

Jonathan Hill, also a former EU financial services commissioner, said it was not in Brussels’ interests to allow London to continue to dominate the European financial market in the way it did before Brexit. “Given that their strategy is to build up the EU, why on earth would they?” said Lord Hill, who is drawing up a series of reforms to the City’s stock market listings regime aimed at attracting more fast-growth and founder-led tech businesses. “The EU will not do us any favours.”

The EU and UK have agreed that following Britain’s departure from the single market on January 1, decisions on access to each others’ markets in financial services will be based on each side declaring unilaterally that the other side’s regulatory systems are “equivalent” to its own. So far Brussels has granted the UK time-limited equivalence on two of the roughly 40 different financial areas where London is seeking market access. The EU has given no further indication on when it will take more equivalence decisions.

The hopes my old European mates had that this would lead to the re-emergence of a European capital markets centre to compete with London has not happened Jonathan Hill Despite this, Lord Hill said Britain had an advantage outside the EU in being able to move more quickly when regulating to attract the next wave of companies in growing industries such as digital, fintech and green finance. “We should be able to do this quicker, more proportionately, more flexibly, than you can at EU27,” he insisted.....

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