A furious storm is brewing up over a hard border between Northern Ireland and the rest of the island which threatens not only the terms of the Good Friday Agreement, but also to put an end to Brexiteers’ dreams of an 'unshackled' UK after Brexit.
Graham Bishop/Paula Martín Camargo
Organised by the Centre for the Study of Financial Innovation (CSFI) with co-presenterBob Penn (Cleary Gottlieb). This blog covers the key subjects since our last meeting that I hoped to cover but, as always, we ran out of time to deal with them all. As a Friend, you can watch the 30th `structured’ CPD web-cast with CISI. These Notes may be read to record a further 30 minutes of `structured CPD’, including a dipping into the links to the underlying stories.
Highlights from the “Brussels for Breakfast” meeting
Now only 381 days until we go over the “cliff” – so the 150th B4B may mark the end of the UK’s EU membership! A lengthy Brexit discussion was inevitable.
Prime Minister May delivered her set-piece policy speech at the Mansion House that had great significance for financial services. On the one hand, she accepted there would be no passporting but on the other hand, called for “mutual recognition” for goods. We had a lengthy discussion on mutual recognition – how it gained prominence in 1992 and the full meaning of Single Market `directives’ being enacted into the laws of each state so that the Commission could launch infringement proceedings if necessary. Nowadays, the supervisory authorities – the ESAs – might take action but the backstop was always actions at the ECJ.
However, this system failed amidst the huge stresses of the GFC and the thrust now is to enact directly applicable Regulations: CRR, MiFIR etc. Coupled with a single supervisor e.g. SSM and a single rule book, financial regulation is well on the way to moving entirely to the European level. Why would EU27 want to go back to the failed system of the 1990s?
The drive towards more integration continues unabated as seven “northern” finance ministers issued a joint statement calling for completion of the banking union but with reservations on “far reaching transfers of competences”. Having checked the Council voting calculator, they are just short of being a blocking minority!
The EBA issued its monitoring of Basel III compliance in terms of the CRD/CRR. The good news is that – in aggregate – EU banks are well above the minimum standards – but there are outliers. There was also news of a concerted attempt to revive correspondent banking by providing standardised method to check a correspondent’s compliance with laws on anti-money laundering, terrorism finance, anti-bribery and know-your-client. This mix of policies has undermined the finance of world trade but the difficulties are immense: SWIFT estimates that 7000 banks each have 1 million or more customers to be checked!
Continuing the theme of moving on from “mutual recognition”, ESMA launched its interactive Single Rule Book to facilitate consistent application for securities legislation under its remit.
These Notes for the Friends of Graham Bishop will be supplemented by our full Workbook for our CPD clients (link) – in conjunction with the 30-minute CISI webcast. We our “CPD Weekly – 10 Minute Read ‘n Verify” (link) complies with ESMA Guidelines
Key items of the rest of the month:
Theresa May gathered her ‘war cabinet’ at Chequers, the PM’s country house, to try to agree on a single voicefor the Government’s approach to a future trade deal with the European Union. But the model understood to be May’s preferred, the ‘three basket approach’ – under which Britain would in time diverge from some rules while conserving others that would also remain subject to change in future, - had been ruled out from Brusselsovernight, as it would breach the bloc’s pledge to forestallcherry-picking. In spite of this categorical negative, the German Chancellor Angela Merkel threw a lifeline to May, suggesting that a bespoke trade deal with the UK didn’t necessarily mean that it was choosing the elements of the single market that suits Britain the most.
The reported agreement among the members of the cabinet, a “managed divergence” based on May’s initial approach, was almost immediately dismissed by Council President Donald Tusk as “pure illusion”, while Irish Taoiseach Leo Varadkar called urgently for a detailed position, saying that the negotiations are at a point “well beyond […] aspirations and principle,” and top EU negotiator Michel Barnier rebuffed May’s aspiration to be able to reject EU rules during transition.
Barnier outlined the EU’s stance towards Northern Ireland during his presentation of the draft Article 50 Withdrawal Agreement, that seeks to speed up talks: to avoid a hard border in the island that threatens the Good Friday Agreement, "Northern Ireland has to be covered by the Union customs code," he reminded – a plan which had previously triggered a row among British and EU officials and had made Scotland call to be kept as well within the single market. The opposition leader Jeremy Corbyn made his boldest speech yet setting out Labour’s position in this regard: UK must have “a” customs union to ensure access to European markets and to avoid controls along Northern Ireland’s border, Corbyn said. [...]
Full article available for consultancy clients here
Hover over the blue highlighted
text to view the acronym meaning
over these icons for more information
No Comments for this Article