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Lord Hill, the EU commissioner for financial services, told the Financial Times that there were “respectable arguments” to be made in favour of Brexit on constitutional and sovereignty grounds. “But I don’t believe there is a respectable argument which says you can have all your independence and sovereignty — and [keep] your single market on the same terms as now,” he said.
It was “misleading” and “very weird” for the Brexit lobby to argue as much.
Access to the financial services market was controlled by financial regulation, he said. “To have a situation whereby you have . . . no say over the rules that govern it, I think, would be an extraordinary position for the City of London to find itself in.”
Lord Hill’s biggest project is to oversee the creation of a “capital markets union”: an ambitious package of legal and regulatory reforms designed to remove barriers to a single market in bonds, equities and other areas of financial services.
As part of this project, he promised to remove barriers to smaller companies listing on stock exchanges. New rules would be announced next week.
But he is fighting an uphill battle to ease restrictions in capital markets, with new regulations, such as the EU’s Mifid II securities rules and global requirements on bank capital for trading activities, still being phased in. The European Commission and European Parliament are now considering delaying the January 2017 start date for Mifid II by a year.
Lord Hill’s attempts to soften the regulatory regime of his predecessor, Michel Barnier, tally with a more emollient approach to bank regulation in the UK and internationally as policymakers focus instead on encouraging economic growth.