How might this play out by say 2024? Could the divergence cause the end of the City’s dominance of European finance? It might well do.
The future of the financial services industry – centred in the City
of London – matters enormously to the health of the United Kingdom’s
economy. The Trade and Co-operation Agreement (TCA) has few provisions
on financial services and the UK now appears set to drive a wedge
between EU and British rules so it can “benefit” from its new-found
Brexit freedom. In reality, this “wedge” is unlikely to benefit the
economic prospects of the City or the United Kingdom.
There can be
no doubt that the EU will use the “autonomy of its decision-making
process” – as stressed in the TCA. If the UK wishes to row alongside the
EU super-tanker and “take” its rules, then the UK will remain
“equivalent”. But current UK policy intentions suggest there will be an
ever-widening gulf by the end of this Commission’s term in 2024 – as the
logical outcome of UK policy. The internationally mobile financial
services industry will undoubtedly take account of this probability in
planning the location of future business opportunities.
Financial Services Club/ZYen
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