London’s financial services can thrive says EU commissioner – but only if we work together
London’s financial services can continue to thrive after Brexit but only if it works with the EU on regulation, according to a top EU diplomat.
In a speech in the capital Valdis Dombrovskis, the EU’s commissioner for financial services, called for a more harmonised international regulatory system, in which the UK can play a central part.
He said: “Regardless of the UK's future relationship with the EU, London will only continue to thrive on the basis of a strong international system.”
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Dombrovskis previously told City PM the EU would not look to “punish” the UK’s financial services after Brexit. He is in London to discuss Brexit with the chancellor, Philip Hammond, as well as City leaders.
He pointed to existing initiatives with the US and countries in the Asia-Pacific region as examples of forums for “effective multilateral and bilateral regulatory cooperation.”
Multiple agreements with other countries already allow regulatory equivalence for financial services firms in various sectors, including clearing, asset management, and insurance.
Dombrovskis said: “All these agreements are mutually beneficial because properly managed financial integration makes our system stronger, keeps our companies competitive, and supports investment and high quality service across different markets.”
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However, the comments come after a member of the German central bank, Andreas Dombret, warned that equivalence would not be sufficient to stop financial services firms moving some operations to Europe.
Dombrovskis also criticised the deregulatory agenda of US President Donald Trump, and issued a veiled warning that the UK should not follow the same path.
“We should be ready to defend longstanding European values when they are threatened or when evidence based policy is assaulted by alternative facts,” he said, referencing the infamous description of easily disprovable comments by Trump’s spokesperson.
He also said the EU is “sensitive to talk of unpicking financial legislation” such as the Dodd Frank regulations in the US, which Trump has promised to abolish.
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“Europe is entitled to gently suggest international cooperation on financial governance is in everyone’s interest,” said Dombrovskis.