Beth Ahmead-Latham 27 Apr 2018 05:38pm

Barnier dismisses financial services market access deal

The EU’s Brexit negotiator announced yesterday that the City can not get the market access to the EU that it wants for financial services

Speaking at the Eurofi High-Level seminar in Sofia, Michel Barnier said that the mutual recognition deal – requested by the UK government and several City groups including Financial Conduct Authority, CBI and The CityUK – would inadequately limit the risks mitigated by current financial regulation and supervision.

The mutual recognition deal proposed by the UK would have allowed Britain to keep selling financial services into the EU's Single Market without following European regulations.

Instead Barnier suggested that establishing equivalence agreements is the main option on offer.

“The EU cannot accept mutual market access without the common safeguards that underpin it” he said, adding that an equivalence system “will operate in a more effective manner if the UK decides not to diverge from our financial regulation”.

In response to claims from multiple City groups that the equivalence system was not designed for a UK-EU trade relationship, Barnier said the EU was improving the equivalence process, he asked, “Why would the equivalence system, which works well for the US industry, not work for the City?”

Barnier concluded that “a significant financial relationship will remain, properly managed and supervised” and that London will continue as a global financial centre.