In the rush to get an EU trade deal, the needs of the City must not be forgotten
With 31 January less than two weeks away, after various twists and turns, the first chapter of Brexit is finally coming to a close.
Although it has performed with resilience and strength in the face of a challenging economic climate, the City has been crying out for certainty and clarity for too long.
And even now, there will be no respite for the sector. This is just the beginning of the Brexit process, not the end. The future trading relationship negotiations will be intricate and complex.
So, what kind of specific future framework does the City want?
This is not an easy question to answer, and in some ways it is one that is still to be settled across the industry. But there are principles that are fundamental in order to ensure that the City can continue to serve its international customers and clients, while also rising to some of the greatest challenges facing society, like climate change.
First, global markets need global standards. Regulatory autonomy is important, but it is also important for households and businesses on both sides of the channel that we continue to work together — ensuring mutual access between the highly interconnected UK and EU financial services sectors, while aligning with global standards to prevent unnecessary fragmentation.
Second, we must remain open to international businesses and markets. London is the capital of capital, and has long been the world’s number one foreign exchange hub, clearing more dollars than New York, more euros than anywhere in the EU, and more RMB than any country outside Greater China
Third, the City needs to be regulated by a globally leading regime that encourages innovation, while delivering appropriate accountability, transparency, and consumer protection. Whatever the outcome of Brexit, it is right that we secure a forward-looking regulatory framework which maintains the UK’s competitive edge by enabling the sector to be innovative and dynamic.
Fourth, we need to be open to international skills and talent. The UK’s future success depends on attracting, retaining and developing high quality talent, and this is particularly the case in the diverse financial and professional services sector.
And finally, any regulatory changes cannot happen overnight. They need to be gradual, thought-through, and follow better regulation principles. One of the great strengths underpinning the success of the UK financial services sector has been its world-leading regulatory framework. As we look forward, it is vital that regulation keeps pace with a fast-changing world after Brexit and beyond.
These pillars should remind us that “getting Brexit done” does not mean doing over our services sector. The December 2020 deadline for EU trade talks is clearly ambitious, but at 80 per cent of the economy, it is crucial the services sector is not sacrificed in the rush to get a deal.
Yes, we may be leaving the EU, but this is not the end of the relationship with our closest neighbours. The City is united on this.
We want a positive future relationship, collaborating on common challenges and opportunities in the interests of our citizens and our businesses.
Main image credit: Getty