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14 April 2021

CEPS: UK financial services should shift focus away from equivalence


...Despite their strategic importance for the UK economy, financial services were not dealt with to any extent in the negotiations, and the agreement itself lacks anything substantive on them. It is fair to say that the City has ended up with a ‘no deal’ in terms of financial services.

After nine rounds of negotiations that took more than six months (March-October 2020) and covered eleven areas, the EU-UK Trade and Cooperation Agreement (TCA) concluded on 24 December 2020.

Equivalence is not a panacea and neither is it part of the agreement. Its determination is a political judgement, and it only solves a few small areas of the Brexit puzzle. Instead of waiting for a bus that will never come (or comes very late), the UK should be pragmatic and move forward. A clear focus would be for London to develop as a non-EU financial centre, prioritise the EU business that can still be done through the City and capitalise on the deep financial services culture, critical mass and economies of scale that made it a global financial centre....

Full paper

CEPS



© CEPS - Centre for European Policy Studies


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