Close UK-EU cooperation needed in financial services after Brexit
27 March 2020
The House of Lords EU Financial Affairs Sub-Committee has written to the Chancellor of the Exchequer, Rt Hon. Rishi Sunak MP, to urge the Government to establish a structured dialogue between the UK and the EU to support cross-border financial services and manage any future divergence.
- Letter: Financial services after Brexit
- Inquiry: Financial services after Brexit
- EU Financial Affairs Sub-Committee
As part of its review of financial services after Brexit, the Committee took evidence from the financial regulators, insurers, bankers, asset managers, academics, representatives from industry bodies and the Economic Secretary to the Treasury, John Glen MP.
Evidence gathered by the Committee emphasises the need to stabilise the future UK-EU relationship in financial services whilst also making the most of the opportunities after Brexit.
In its letter to the Chancellor, the Committee raises the following key points:
- While the UK is currently fully aligned with the EU, there is a risk that the EU's equivalence decisions will be politicised and could be withdrawn at very short notice. There should be regular and structured dialogue to provide a forum for discussion and resolve any possible disagreements.
- The Government should delegate more powers to the financial regulators after Brexit, to give the UK's regulatory regime more flexibility and increase its ability to respond to changes. This will require increased parliamentary oversight of the financial regulators' activities.
- The UK may wish to make some targeted adjustments to ensure that the regulatory regime is fit for purpose. The UK should take a leadership role in promoting international cooperation in financial services after Brexit by promoting global standards.
Lord Sharkey, Chair of the EU Financial Affairs Sub-Committee, said:
"While the Government is quite rightly currently focussing on the coronavirus pandemic, at some point it will need to return to considering the future of the UK's financial services sector and negotiating its relationship with the EU.
"When it does, it should pay particular attention to how it will work with the EU to support cross-border financial services and manage any future divergence."