Brexit offers Britain a chance to do things differently in financial services, finance minister Rishi Sunak said on Sunday, but it will co-operate with the European Union on an approach to the sector despite little detail on the topic in its trade deal.
From January 1, British-based financial services groups lose automatic access to the EU’s single market, and both sides have said new market access must be negotiated outside the trade agreement in specific equivalence deals.
“Now that we’ve left the European Union, we can do things a bit differently (in financial services),” Sunak told broadcasters.
Britain and the EU clinched a trade deal on Thursday, but Prime Minister Boris Johnson has admitted it is an accord which does not have as much as he would have liked about the financial services sector and regulatory equivalence.
Under a system known as equivalence, access to EU markets will not be granted to banks, insurers and other financial firms based in Britain unless their home rules are deemed by Brussels to be “equivalent”, or as robust as regulations in the bloc.
The two sides will aim to agree on a memorandum of understanding on regulatory cooperation in financial services by March 2021, and Sunak said that such language should provide reassurance.
“This deal also provides reassurance because there’s a stable regulatory co-operative framework mentioned in the deal,” he said.
“I think (that) will give people that reassurance that we will remain in close dialogue with our European partners when it comes to things like equivalence decisions.”