30 January 2019

Financial Times: UK financial watchdogs seek to shore up post-Brexit EU accords

Andrew Bailey, the head of the Financial Conduct Authority, revealed the negotiations on Tuesday during testimony to the Treasury select committee, alongside John Glen, the City minister, and Sam Woods, chief executive of Prudential Regulation Authority.

The FCA and PRA are in negotiations with not only the European supervisory authorities such as the European Banking Authority but also national financial regulators across the other 27 member states of the bloc.

The select committee is scrutinising the “unprecedented” powers given to the Treasury, the FCA and the Bank of England’s Prudential Regulation Authority to keep financial services open for business, even in the hardest of Brexits. The “statutory instruments” allow them to push through any changes deemed necessary without the normal parliamentary checks and balances.

“Sam and I are in the business of negotiating MoUs with the EU authorities in the event this situation comes to pass to enable us to have access to information to enable us to do our job, and we obviously take that very seriously,” Mr Bailey said on Tuesday.

His comments come 59 days before the UK is scheduled to leave the EU and as MPs prepared to vote on measures that Theresa May, UK prime minister, is putting forward in an effort to break the impasse since a heavy defeat this month on the withdrawal deal she struck with the rest of the EU. Mrs May told MPs on Tuesday that she would seek to reopen the divorce deal.

The financial watchdogs have been responsible for the “lift and shift” of EU rules into UK legislation as a first step to cope with how Brexit will change financial regulation in the UK. On Day One of Brexit, the rule book should look the same but for elements known as “inoperables” that cannot be copied — for instance, any reference to EU watchdogs having direct oversight of UK-based companies. [...]

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