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07 September 2017

Brexit Weekly

CCP location post-Brexit, banks' Brexit relocation planning, MiFID II, Northern Ireland after Brexit, May's plan for EU citizens' rights, UK's future customs relationship with the EU, Brexit 'transition period',UK's EU data protection laws after Brexit and more.

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  Articles from 27 July 2017 - 07 September 2017

  Brexit & UK
ISDA: Brexit – CCP location and legal uncertainty
The vast majority of EU clearing currently takes place in London, but there are suggestions that EU regulators might introduce a location policy for euro-denominated swaps to be cleared in the EU.  View Article
Financial Times: New Brexit threat looms for asset managers
The EU securities regulator raises questions about the current industry structure.  View Article
Reuters: UK finance sector to propose 'mutual access' post-Brexit trade pact - document
The UK's financial sector is to propose to the government a "mutual access" trade pact between Britain and the European Union that would allow banks and other firms to continue doing cross-border business after Brexit, according to a draft report seen by Reuters.  View Article
23 cities offer to host UK-based EU agencies
The Council has received 27 proposals by the member states, related to 23 cities, to host the EU agencies currently based in the UK. There have been 19 offers to host the European Medicines Agency (EMA) and 8 for the European Banking Authority (EBA).  View Article
Financial Times: Brexit set to raise UK banks’ costs 4% and capital needs 30%
Brexit will push up costs for banks by as much as 4 per cent and their capital requirements will rise by up to 30 per cent, according to the most detailed assessment yet of what Britain’s departure from the EU means for the sector.  View Article
Financial Times: Regulators get ready to authorise ‘ring-fenced’ UK banks
Regulators at the Bank of England are quietly getting ready to authorise the creation of the three largest new banks to come into existence in the UK.  View Article
City AM: ECB urges banks to speed up Brexit relocation planning: "The clock is ticking"
Sabine Lautenschlaeger, vice chair of the ECB’s supervisory board, said banks are “not as far advanced as we would like them to be” in their Brexit planning.  View Article
City AM: Asia finance "committed" to City after Brexit finish
Asia's key financial centres remain committed to the UK despite the Brexit vote, according to the City’s top lobbying body.  View Article
Financial Times: MiFID vies with Brexit as City traders’ main problem
The arrival in January of MiFID II, sweeping European legislation that aims to inject greater transparency and reinforce investor protections, is looming uppermost for many trading entities in London.  View Article
Financial Times: Banking watchdog warns of risks from cliff-edge Brexit
Sam Woods has given his starkest warning to date over the risks the financial system faces from a cliff-edge Brexit without a transition period.  View Article
Financial Times: MEPs seek tougher rules on London euro clearing after UK quits EU
The parliament and national governments will next month begin discussing proposals that would require UK clearinghouses handling large volumes of euro-denominated contracts to comply with EU rules and accept European supervision.  View Article
The Guardian: Don't relax rules on City after Brexit, Mark Carney warns
The Governor of the Bank of England has predicted that the financial sector could double in size to be 20 times as big as GDP within the next 25 years, but warned that the government must hold its nerve and resist pressure to water down regulation after Brexit.  View Article
Financial Times: ING chief warns over UK access for European banks after Brexit
The chief executive of ING, the Dutch bank, has warned that London would “shoot itself in the foot” if it forced banks based elsewhere in Europe to set up separately capitalised operations in the UK after Brexit.  View Article
Department for Exiting the EU: Future customs arrangements: a future partnership paper
A new paper setting out proposals for a future customs relationship with the EU has been unveiled by the Government in the first of a series of papers on the UK’s future partnership with the EU.  View Article
Hammond and Fox: We will leave customs union during Brexit transition
Ministers’ joint declaration in The Guardian means UK could strike trade deals with non-EU countries from moment it leaves in March 2019.  View Article
Liam Fox: Britain does not have capacity to strike trade deals now
Britain has turned down countries wishing to strike free-trade deals after Brexit because the government does not have the capacity to negotiate them, the U.K.’s International Trade Secretary Liam Fox said.  View Article
Institute for Government: A customs deal is necessary but not sufficient for frictionless trade
A deal on customs is important to reducing post-Brexit trade friction, but a new paper from the IfG argues that leaving the EU will disrupt country’s important integrated supply chains in areas like automobile manufacturing. It will create friction in cross-border trade in goods.  View Article
POLITICO: UK risks delays at ports if it fails to strike customs deal: report
Goods coming into Britain could be stuck at ports and other points of entry for up to three days if Theresa May fails to strike a proper customs agreement with the EU, according to a report by the British Retail Consortium.  View Article
POLITICO: Post-Brexit customs checks will lead to border chaos, high costs
Customs checks after Brexit will cost the United Kingdom more than €1.1 billion per year and lead to massive delays at British borders, according to an analysis by consulting firm Oxera.  View Article
POLITICO: MPs warn Theresa May over customs union
Theresa May’s government is being “irresponsible” in pulling the U.K. out of the EU customs union without setting out a single, clear alternative, a cross-party group of MPs said in a new report.  View Article
Financial Times: Irish PM calls for EU-UK customs union as clock ticks on border
Leo Varadkar, Ireland’s prime minister, has suggested Britain could join a specially created customs union with the EU after it leaves the bloc, in a speech in which he warned that the clock was ticking to find solutions to Brexit-related problems on the island.  View Article
Department for Exiting the EU: Position papers published ahead of third round of negotiations
The papers outline the UK’s negotiating approach to goods on the market and to confidentiality and access to official documents.  View Article
Financial Times: Davis proposes post-Brexit dispute mechanism on EU relations
David Davis, Brexit secretary, will examine the precedent set by the European Free Trade Association court, which deals with Iceland, Liechtenstein and Norway in their relations with the EU single market.  View Article
The Guardian: UK hopes of autumn trade talks 'will be dashed', says Slovenian PM
Miro Cerar says after opening talks the two sides are too far apart on citizens’ rights, financial settlement and the Irish border.  View Article
Sky News: Next phase of Brexit talks 'likely delayed' to December
Sky sources say the next phase of Brexit talks is now expected to be in December as London waits for the new German government.  View Article
Michel Barnier: ‘No decisive progress’ on key Brexit issues
The EU’s chief negotiator is pessimistic about the prospect of moving to trade talks in October.  View Article
David Davis reports on second round of Brexit negotiations
The Secretary of State for Exiting the European Union, Rt Hon David Davis MP, has written to the Lords EU Committee to summarise the outcome of the second round of Brexit negotiations.  View Article
Secretary of State update to the House of Commons on EU negotiations
David Davis spoke to the House about the July and August negotiating rounds.  View Article
POLITICO: European Parliament slams UK’s Brexit stance on citizens’ rights
MEPs said London would not sufficiently protect families from being divided by residency restrictions, would cast EU citizens living in Britain into a sea of legal uncertainty, and would create a tangle of unnecessary red tape, according to a report by the Parliament’s Brexit steering group.  View Article
The Guardian: Leaked document reveals UK Brexit plan to deter EU immigrants
Britain will end the free movement of labour immediately after Brexit and introduce restrictions to deter all but highly-skilled EU workers under detailed proposals set out in a Home Office document leaked to the Guardian.  View Article
Bloomberg: UK said to plan visa-free travel for Europeans after Brexit
Britain is considering allowing European Union citizens to travel freely to the country even after Brexit as Prime Minister Theresa May’s government draws up plans to manage immigration from the bloc.  View Article
POLITICO: Majority of Brits support high-skilled EU migration
A large majority of Brits (86 percent) want the number of high-skilled EU migrants to remain steady or increase further after Britain leaves the EU, according to a survey published by the British Future think tank.  View Article
The Guardian: A million skilled EU workers see their future outside Britain
Almost a million EU citizens working in Britain – many of them young, highly qualified and much sought-after by businesses – are either planning to leave the country or have already made up their minds to go as a result of Brexit, a study has found.  View Article
Financial Times: Number of EU nationals working in UK hits record high
The number of EU nationals working in the UK has hit a record high, driven by a large increase in the number of Bulgarian and Romanian citizens who have found employment here.  View Article
City AM: UK immigration falls as rising number of EU workers return home after Brexit
Immigration figures have dropped by almost a third in the last year, as EU workers begin to pack up and leave following the Brexit vote.  View Article
LSE: Is EU talent being chased away from the UK by Brexit?
Authors of the analysis find support for the view that Brexit has reduced the attractiveness of the UK for recent high-skilled graduates from the EU, but it is far from clear whether the magnitude of this decline will have a significant lasting effect on the UK economy.  View Article
The Times: Australia wants equal Brexit rights for its immigrants
Commonwealth countries have said that the government should give their citizens the same rights as Europeans to come and live in Britain after Brexit.  View Article
Bloomberg: UK Brexit chief dismisses 50 billion pounds EU payment reports
UK Brexit Secretary David Davis dismissed as “nonsense” published reports that Prime Minister Theresa May is set to approve paying as much as 50 billion pounds to leave the European Union.  View Article
Andrew Duff: Brexit: Dealing with withdrawal symptoms
Andrew Duff reviews the problematic first phase of the Brexit negotiations and suggests ways to make progress on the three key issues: citizens’ rights, finance and Ireland.   View Article
David Davis' speech at US Chamber of Commerce
Brexit Secretary spelled out "the kind of country the UK will be outside the EU", and said increasing efforts to free trade further and liberalise services were required. Davis conceded that there won't be a "race to the bottom" in standards.  View Article
BCC and DIHK: Joint UK-German call to put shared economic interests first in Brexit negotiations
The British Chambers of Commerce (BCC), and the Association of German Chambers of Commerce (DIHK) have called for UK and EU negotiators to put a clear focus on our shared economic interests as Brexit talks reconvene in Brussels.  View Article
FAZ: German industry wants clearer lines
An article in FAZ shows how representatives of the German business and banking sector are becoming increasingly vocal about how the slow pace of the Brexit negotiations and the UK's lack of clarity is damaging for German businesses.  View Article
Bloomberg: UK's May seeks to preserve gains from EU-Japan trade deal
Prime Minister Theresa May said she’s keen for the U.K. to keep any benefits from a potential trade deal between the European Union and Japan after its scheduled departure from the bloc in March 2019.  View Article
UK Trade Policy Observatory: The EU Regulatory Magnet: What Are the Consequences for the UK?
The new EU-Ukraine Association Agreement (AA), entered into force on 1st September, may reveal some lessons for the UK as it seeks new models of trade relationships.   View Article
The Independent: UK will not become tax haven after Brexit, says Philip Hammond
Britain’s economic model will stay 'recognisable European' after it leaves the bloc, says Chancellor.  View Article
The Telegraph: EU could be open to Brexit climbdown over trade talks amid revolt led by France
France and other EU nations have signalled they are willing to begin Brexit trade talks as early as October in a move that opens the door to a climbdown by the EU, The Telegraph has learned.  View Article
Institute of Economic Affairs: ‘No deal’ with EU on trade post Brexit does not mean disaster for the UK
A new report from the Institute of Economic Affairs calls for unilateral free trade following Brexit, complemented by free trade agreements with our major trading partners such as the US, Canada and Australia.  View Article
Financial Times: London trading centres put Brexit plans into action
Back-up measures take shape after traders tire of ambiguity about Britain’s future outside EU.  View Article
The Times: Brexit trade negotiations: May set to bypass Brussels and talk nation to nation
Theresa May is preparing to go over the heads of Jean-Claude Juncker and Michel Barnier and appeal to Europe’s leaders to approve the start of trade talks with the EU this autumn, The Times reports.  View Article
The UK in a changing Europe: Brexit necessitates an agreement-plus for Northern Ireland
If the UK Government wants to really get to grips with the consequences of Brexit for the peace process, it needs to consider the unique needs of the territory and people of Northern Ireland – not just the line of the border around it.  View Article
POLITICO: Irish foreign minister takes swipe at UK’s Brexit proposals
Britain ‘has a responsibility to its neighbors and friends,’ says Simon Coveney after a meeting with Michel Barnier.  View Article
Keir Starmer: No ‘constructive ambiguity’. Labour will avoid Brexit cliff edge for UK economy
Labour will seek a transitional deal and seek to remain in a customs union with the EU and within the single market.  View Article
Bloomberg: UK Labour party will try to amend May's Brexit legislation
The UK Labour Party moved its opposition to Theresa May’s Brexit strategy up a notch by saying it would try to amend her European Union Withdrawal Bill to change clauses that give ministers power to modify laws with little scrutiny.  View Article
Brexit fundamentally challenges constitutional balance between Parliament and Government
The Constitution Committee calls for the Government to act on the Committee's criticism of the "unprecedented" transfer of powers from Parliament to Government, proposed in the European Union (Withdrawal) Bill.  View Article
Peter Mandelson: Labour exposes the false promises of Britain’s exit
The former EU trade commissioner writes in the FT that the Labour party announcement that it will now support staying in the single market when Britain leaves the EU renders it possible to construct a mutually beneficial partnership with the EU.  View Article
Financial Times: Vince Cable raises doubts about Brexit ever happening
There is a growing possibility of a second referendum on Britain leaving the EU as tensions grow within the Conservative and Labour parties about the likelihood of a beneficial Brexit deal being achieved, Liberal Democrat leader Vince Cable has said.  View Article
Business Insider: Morgan Stanley says there is a 10% chance that Brexit won't actually happen
There remains a small chance that Brexit will be reversed and Britain won't actually leave the European Union, according to research by analysts from Morgan Stanley.  View Article
Bloomberg: Brexit is beginning to look like no Brexit
The debate over transition periods reveals a deeper truth: The 2016 vote may have been pointless, writes Leonid Bershidsky.  View Article
Bloomberg: Top EU official says Britain was ‘stupid’ to vote for Brexit
The UK’s decision to leave the European Union was “stupid” and only the will of the British people can stop it, Martin Selmayr, the chief of staff to European Commission President Jean-Claude Juncker, said.  View Article
The Times: Watchdog ‘failing to ready firms for Brexit’
The FCA has been warned that it is failing to give financial firms a clear idea of how to prepare for Brexit with fewer than a fifth of respondents to a survey saying it was doing a good job.  View Article
Financial Times: MUFG eyes Amsterdam as post-Brexit EU base
Mitsubishi UFJ Financial Group, Japan’s biggest bank, plans to choose Amsterdam as the new EU base for its investment banking operations to cope with the disruption of Brexit, according to two people briefed on the situation.  View Article
The Guardian: Majority of UK public backs Brexit 'transition period', poll finds
Observer/Opinium poll finds nearly half of those asked believe there should be no second referendum on departure terms.  View Article
Financial Times: A short transition can help Britain make the best of Brexit
But there is a danger that any arrangement with the EU will become semi-permanent, writes Gerard Lyons.  View Article
Vince Cable: Brexit transition would be a ‘massive car crash in slow motion’
Liberal Democrat leader told POLITICO a Norway-style deal with EU post Brexit has ‘nothing really to commend it.’  View Article
Institute of Directors spells out Brexit transition options
The Institute of Directors has called on the Cabinet to come to a collective decision on how to approach a transitional agreement as soon as possible.   View Article
The IoD verdict on the best model for Brexit
In the report Navigating Brexit, the IoD puts forward the case for the UK to rejoin the European Free Trade Association (EFTA) while outlining tradeoffs for other types of models.  View Article
Stephen Kinnock: Britain can use EEA as comfortable waiting room before Brexit
EEA membership must be seen as a well-established and relatively comfortable waiting room in which the UK economy can sit for as long as it takes the government and its counterparts to negotiate a long-term deal, writes Labour MP in the FT.  View Article
AFME publishes new paper on the need for early clarity on a Brexit transition
The paper is intended to explain in more detail the importance and necessity of transitional arrangements and summarises AFME’s views on what such arrangements should look like.  View Article
Financial Times: Analysts halve UK profit growth forecasts for 2018
Profit growth at the UK’s largest companies is expected to fall by more than half in 2018, a review of analyst forecasts has found, as a year of post-Brexit currency gains gives way to longer-term concerns about the economic consequences of Britain’s break with Europe.  View Article
Economists for Free Trade: Brexit could boost UK economy by £135 billion
Brexit could boost the UK economy by as much as £135 billion a year, according to a new report by a team of economists.  View Article
Bloomberg: BOE's Saunders says Brexit risks don't justify low rate
The risks related to Britain’s exit from the European Union aren’t reason enough to hold off raising interest rates, according to Bank of England policy dissenter Michael Saunders.  View Article
Bloomberg: UK Brexit concerns increase as businesses fret about economy
UK companies are getting more worried about the economy and feeling less confident in spending money on hiring or investing, according to a new report.  View Article
LSE: Why Brexit has led to falling real wages in the UK
One of the economic trends which has attracted attention so far is a drop in real wages for UK workers. Simon Wren-Lewis explains that UK firms are anticipating a decline in the terms of trade following Brexit by not allowing nominal wages to rise to compensate for higher import prices.  View Article
The Times: Foreign-owned firms ‘hold key’ to Britain’s productivity woes
Encouraging more foreign businesses to set up in the UK may help to solve the country’s chronic productivity problem, analysis by the Bank of England has suggested.  View Article
Nick Clegg: Shape the contours of Brexit Britain’s final destination
The EU Brexit negotiations are stumbling because no one knows where they are heading, writes in the FT former Lib-Dem UK Deputy Prime Minister.  View Article
The Irish Times: Why Little England Brexiteers miss the point of the European Union
Patrick Smyth writes that an obsession with the foreignness of all things “European” has obscured the argument for the EU from the point of view of its function: it performs essential tasks that the UK needs performed.  View Article
The Guardian: Don’t be fooled: Brexit Britain wants a deal. Europe just wants a clean break
Natalie Nougayrède writes that this week’s talks were fractious for a reason. The UK has barely begun to understand Brussels’ mindset – and is still negotiating with itself.  View Article
Financial Times: Brussels has no clear vision for Brexit, City envoy says
European leaders are just as divided as UK over how departure should look, said Jeremy Browne.  View Article
OMFIF: Brexit's unanswered questions
The UK negotiators lack a clear definition of what they want Britain's future overall relations with the EU to resemble. Without a strategic decision, it will be difficult to settle terms for leaving and subsequent rules governing trade links.   View Article
Charles Grant: The real problem with Brexit talks is there are hardliners on both sides
Behind the scenes, top UK and EU officials have discussed a compromise that could unblock the separation talks. Yet hardliners on both sides are preventing the negotiators from moving towards a deal.  View Article
POLITICO: UK’s data flows under EU surveillance
The UK’s beefed-up surveillance law — the Investigatory Powers Act, which came into force at the end of last year — seems to violate EU fundamental rights and will cause problems for any eventual arrangement on data flows post Brexit.  View Article
Financial Times: UK assures on ‘close’ EU data protection laws after Brexit
Britain is pushing to closely mirror the EU’s data protection laws after Brexit, in a bid to ensure the free flow of data across borders which is vital in underpinning the digital economy.  View Article
YouGov: Most Brexiteers say economic damage ‘price worth paying’
More than 60 per cent of Brexit voters believe that “serious” damage to the UK economy would be a price worth paying to achieve Brexit, according to YouGov, with older voters particularly supportive of ensuring the UK leaves the EU, whatever the cost.  View Article
OMFIF: Brexit threat to Thatcher-era reforms
Hard-core Brexiteers, almost all of whom are Thatcherites, might see their wish to leave granted, but at the price of dismantling the policies of their heroine: a hard exit will erode competitiveness, exports and jobs.  View Article
Die Presse: Living in the era of ignorance
Die Presse writes how recents studies from Austria and Germany have looked at different aspects of misinformation in the context of Brexit.  View Article
Friedrich Ebert Foundation: What holds Europe together? The EU in the wake of Brexit
A representative eight-country study of the Friedrich-Ebert-Stiftung, conducted by policy matters.  View Article
The Guardian: Labour can stop Brexit – but only with fresh vote, says Sadiq Khan
London mayor raises hopes of remainers, arguing pledge in manifesto or second referendum would both be legitimate.  View Article
Financial Times: Philip Hammond seeks ‘off-the-shelf’ Brexit transition
UK chancellor Philip Hammond has told business leaders he wants to negotiate a simple “off-the-shelf” transition deal with Brussels to maintain current trading relations with Europe for at least two years after Brexit.  View Article
The Independent: Ireland 'demanding sea border with UK after Brexit'
Theresa May is facing tough new demands by the Irish government that could see the Irish Sea become the country's post-Brexit border with the UK, according to reports.  View Article
Centre for Economic Performance: Brexit, trade and the economic impacts on UK cities
The paper summarises new analysis by the LSE’s Centre for Economic Performance (CEP) and Centre for Cities, which examines for the first time the potential impact of both a ‘hard’ and ‘soft’ Brexit on British cities in the ten years following the implementation of new trade arrangements with the EU.  View Article

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