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Germany is laying plans to open its own direct links to the U.K.’s Financial Conduct Authority in case fellow European countries fail in their efforts to reach a joint deal. Regulator BaFin is looking at fall-back options “to ensure as friction-free a transition as possible,” the regulator’s vice president, Elisabeth Roegele, said in emailed comments to Bloomberg. That goes further than statements from France, which has signaled that it’s relying on a joint pact.
London is the European Union’s largest financial center, and regulators on both sides of the channel are working to prevent market turmoil when the country leaves the bloc. Germany, Europe’s biggest economy, is taking an increasingly pragmatic approach to supervision as the clock ticks down and politicians in the U.K. and rest of the EU have yet to reach a wider withdrawal agreement.
Roegele said that like France, she supports efforts by the European Securities and Markets Authority to reach a multilateral deal between the FCA and EU regulators. That should cover how the watchdogs will supervise financial firms that delegate responsibilities and transfer risk between their units in the U.K. and the EU, she said in her emailed comments. [...]