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French watchdog expects Britain to diverge from EU on financial rules

French markets watchdog AMF expects Britain to take advantage of Brexit to diverge from European Union financial rules. This is in an effort to make the City of London more attractive to investors.

Brussels has yet to decide on how much direct access it will grant Britain in financial services. And so, the City has been largely cut off from the EU. This is a sector not covered by the bloc’s post-Brexit trade deal with the UK. Britain’s access to EU markets will depend upon the fact whether Brussels deems UK financial rules sufficiently equivalent or aligned with those in the 27-nation bloc. And this is made harder by divergence on either side.

AMF Secretary General Benoit de Juvigny said that he obviously see an increasing divergence between the UK and EU27, but also he thinks that it is quite normal. This statement was made in a conference held by the International Swaps and Derivatives Association. He also added that the UK intends to take advantage of its new autonomy. And also tries to develop its own financial centre, its own financial market, and the EU is attached to its sovereignty and wants to develop its own financial services.

Mairead McGuinness bloc’s financial services chief told the ISDA conference that equivalence would not be granted if there were a wide divergence in rules. In the area of financial services France said it would delay implementing any EU cooperation agreement with Britain. This is until the UK grants European fishermen fair access to its rich fishing waters.

Swathes of trading in euro-denominated derivatives have to leave the City for the EU and New York. This is due to the lack of cross-border access. And hence this has put branches of French and other EU banks in London at a disadvantage. De Juvigny said that he really thinks that it is a bad solution. And also, he hopes that the EU authorities in future find a different solution.

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Finance

Euro zone ministers expect inflation to slow in 2022

The acceleration of euro zone inflation, driven energy prices, is mostly temporary. Then the price growth will slow down again. The euro zone finance ministers agreed that, that too the next year as forecasted by the European Central Bank and the European Commission.

Paschal Donohoe, chaired the talks of the ministers in Luxembourg. In a news conference he said that there was also agreement that the inflation spike was not an argument against the transition to renewable sources of energy. This is under the EU’s ambitious plan of reducing CO2 emissions to zero by the year 2050.

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Finance

Under new rules, borrowing for investment sensible

British finance minister Rishi Sunak said that the government borrowing to fund investment was a sensible thing. This is to allow under new fiscal rules that he is likely to announce, unlike borrowing for day-to-day spending. He said that borrowing for capital investment that is going to drive up their growth is probably a sensible thing for them. And that too particularly in an environment of slightly lower interest rate. Sunak stated this in an event on the sidelines of the annual conference of Britain’s ruling Conservative Party. This event was organized by the Taxpayers’ Alliance advocacy group. Sunak stated in that event, that borrowing for more day-to-day spending is probably less something that you would want to have as part of your framework.

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Finance

IMF board to interview Georgieva-sources

The International Monetary Fund’s executive board is going to interview Managing Director Kristalina Georgieva. This is regarding that; its reviews claims that she pressured World Bank staff to alter data to favor China in her previous role. Board members were initially expected to meet with Georgieva. But spent their time working on other regular business matters.

The board members spent hours for questioning lawyers from the WilmerHale firm. This is about their World Bank investigation report which alleged that Georgieva, as the bank‘s CEO applied undue pressure on staff, to alter data in the flagship “Doing Business” report to benefit China. Then, an IMF spokesperson said that the IMF board remains committed to a thorough, objective, and timely review of the matter. Georgieva has strongly denied the accusations.

The upcoming interviews could prove pivotal in either increasing support for Georgieva. This is with many IMF shareholders are keen to wrap up the board’s deliberations on the matter. The fund’s most influential member governments, including the top shareholder the United States, have withheld public judgment. The World Bank tasked WilmerHale with investigating the “Doing Business” data irregularities identified in 2020. The law firm’s report contends Georgieva. The former World Bank President Jim Yong Kim’s office pressured staff to manipulate data so that the China’s global ranking in the “Doing Business 2018” study of investment climates rose to 78th from 85th.

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