16 December 2020

FT: EU cannot be ‘captured’ by City of London, warns financial services chief

The EU cannot permit itself to be “captured” by the City of London given the UK’s plans for regulatory divergence, a top European official has warned, as she urged the financial services sector to prepare for change after Brexit.

Mairead McGuinness, the EU’s financial services commissioner, said that the bloc’s goal was to ensure in the medium and longer term that it is not overly reliant on third countries in strategically important areas, be they pharmaceuticals or financial services. She said this was critical in the case of financial stability, where the EU needed to respond to the “logic of Brexit” — namely Britain’s desire to deviate from the EU in the realm of financial regulation.

“Our interest is making sure that we are not captured by a system that we don’t regulate, or controlled by it,” Ms McGuinness told the Financial Times in an interview. “I think some of the stakeholders or market participants believe that nothing will change. And we have been at pains to say, in every sector including the financial sector, that nothing will stay the same as it is now, and [to] prepare for change.”

The EU has been considering whether to extend access rights — known as “equivalence” decisions — to parts of the UK financial services sector as the two economies prepare for Britain’s exit from the single market in just over two weeks. In doing so, the bloc is balancing competing priorities, as it seeks to ensure European companies have ready access to finance even as it pursues a strategic autonomy agenda — allowing Europe to stand on its own two feet without relying too heavily on countries outside the bloc....

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