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.