EU engaged in ‘very serious escalation’ over UK financial services, says Bank of England governor
The Bank of England governor, Andrew Bailey, has accused the European Union of trying to poach business from the City of London in the wake of Brexit, labelling the bloc’s recent activity a “very serious escalation”.
Mr Bailey told the Treasury Select Committee on Wednesday the EU now seems more interested in taking euro-denominated derivatives clearing business out of London and into the EU than making sure the UK’s regulations are “equivalent” to the bloc’s for financial stability reasons.
“That seems to be where the debate is heading,” he told MPs.
“I’m not surprised by that. Brexit has been the stimulus to revise this debate.”
The governor said it looked like the EU was preparing to exert regulatory pressure on EU financial firms to shift their activity out of London and into the EU.
A document from a European Commission working group was reported by Reuters this week to show Europe’s largest banks are being asked justify why they should not clear derivatives in the EU.
“Frankly, it would be a serious escalation of the issue,” said Mr Bailey, and suggested such pressure would be of “dubious legality”.
“I have to say to you that would be highly controversial – and that would be something that we would have to, and want to, resist very firmly.”
Mr Bailey did not specify what form that resistance would take, saying it would be for ministers to decide.
https://www.msn.com/en-gb/money/othe...out&li=AAnZ9Ug