Access to the EU market will be more difficult for British companies
City of London must prepare for change, warned Mairead McGuinness, one of the world’s largest financial centers in the world. McGuinness said in an interview with Bloomberg TV on Friday that the agreement on financial services is still a long way off. According to her, the EU does not have a fixed deadline for reaching an agreement on financial services. She emphasized that Brexit would inevitably make it more difficult for London companies to access the EU market.
“Change is coming,” McGuinness said. According to her, the common market for financial services will not be restored in any way, as Britain has decided to leave the common market. She added that Britain is beginning to feel the negative consequences of its decision.
The EU-UK trade agreement does not cover financial services. After the final exit from the EU common market, companies are trying to adapt to the new situation. On the first trading day of the new year, on January 4, London lost daily trades in shares worth more than 6 billion euros, which were transferred to other European stock exchanges.
Derivatives traders are directing more to New York and outside Europe in general. JPMorgan Chase, Goldman Sachs and other companies that relied on London’s divisions for decades moved assets worth billions of euros and thousands of employees to new offices in Frankfurt am Main, Paris and other European cities.
McGuinness signaled that the EU would first negotiate with the United Kingdom a memorandum of understanding on regulatory cooperation, which should be ready in March before granting British companies access to the common market. The equivalence process will decide how much investment banking and business will be able to remain in London.
The United Kingdom currently has almost the same rules as the EU, but several British politicians have already signaled changes in many areas.
Finance Minister Rishi Sunak has suggested that there could be widespread deregulation similar to that implemented by Prime Minister Margaret Thatcher in the 1980s. McGuinness said the EU would closely monitor these changes.