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Bailey said in London on Thursday that regulators should strive to preserve as much open access and free trade as possible as the U.K. withdraws from the European Union, and that transitional arrangements are necessary to allow for a “smooth path” to the new landscape.
It would be regrettable all round if we put firms into this position where they feel they’re in a bind because they have to do practical implementation of contingency planning before they know the context in which they’re going to be working in the future,” Bailey said. “We need it to be known during the course of this year.”
The financial industry has made a transition one of its top priorities in Brexit talks to avoid a cliff-edge effect whereby EU rules cease to apply in the U.K. before new arrangements are in place. With the Brexit starting gun fired earlier this year, firms have begun activating plans to move operations from London.
Deutsche Bank AG is preparing to move large parts of the trading and investment-banking assets it currently books in London to its home town of Frankfurt in response to Brexit, people familiar with the matter said. [...]
“Early agreement on transition is the single most important thing for the industry. It is where we should apply the strongest political pressure,” John McFarlane, chairman of Barclays Plc, said on Thursday. “Leaving it to the end of the negotiation will be worse for everyone. Clarity needs to emerge soon.”
So far, the EU has taken a hard line in the discussions and said that any transition arrangement will depend on progress in withdrawal talks. [...]