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EU Brexit chief sees special care for financial service ties

Reuters  |  BRUSSELS 

By Alastair Macdonald

BRUSSELS (Reuters) - The European Union's Brexit negotiator Michel said on Saturday that the will demand "special vigilance" before letting British financial firms access the bloc because of the large risk could pose to the EU's financial stability.

Responding to a report in the Guardian which said he had told lawmakers that he wanted a special deal to maintain firms' access to the City of London, tweeted: "When asked on equivalence I said: would need special vigilance on financial stability risk, not special deal to access the City."

An spokesman said the Guardian report did "not correctly reflect" Barnier's comments to a closed door meeting with members of the European Parliament last week.

officials said the point was making when asked about Brussels' willingness after Brexit to recognise British financial regulations as "equivalent" in rigour to those of the was that, as a lot of business was likely to still pass through the City, equivalence rules would have to be much more tightly drafted compared to those for smaller centres.

The Guardian quoted minutes prepared by parliamentary aides as saying told lawmakers: "Some very specific work has to be done in this area ... There will be a special/specific relationship. There will need to be work outside of the negotiation box ... in order to avoid financial instability."

officials said Barnier, a Frenchman who ran financial services policy, was not speaking of a "special deal" to limit the impact of Brexit on financial services trade between and the but rather emphasising that Brussels would have to take special care not to ignore stability risks in London.

EQUIVALENCE

The officials said he responded to a question on equivalence by noting that the extent of rules governing relations with non-financial centres was proportional to the volume of business conducted in them -- and so to the risk of, say, a bank collapse in destabilising markets on the continent.

With, say, the United States, the has negotiated accords to recognise the "equivalence" of, for example, bank supervision standards to make it easier for European companies to use U.S. banks and let U.S. institutions sell services in the EU.

The extent of such equivalence agreements has been a major concern for British-based banks wanting continued access to the market. Other governments have said they will welcome financial firms moving out of and say Britain's economy and its big services sector must pay a price for Brexit so that it does not inspire voters in other countries to follow suit.

ministers and officials acknowledge that damage to London's global financial centre caused by Brexit will hurt not only but the other 27 states.

"Both the UK and the will suffer," Maltese Finance Minister Edward Scicluna said on Thursday as Malta took on the rotating chair of councils.

"We will lose that efficient centre," he told reporters, forecasting that many financial firms would relocate to various cities in the EU. "That will be a loss ... The will suffer once services are fragmented. It will be longer term."

Nonetheless, Scicluna said, the signs of banks and other City firms preparing to move operations to other parts of the amid uncertainty about the terms of Brexit showed that the immediate cost was much greater for Britain.

(Editing by Angus MacSwan)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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EU Brexit chief sees special care for financial service ties

BRUSSELS (Reuters) - The European Union's Brexit negotiator Michel Barnier said on Saturday that the EU will demand "special vigilance" before letting British financial firms access the bloc because of the large risk London could pose to the EU's financial stability.

By Alastair Macdonald

BRUSSELS (Reuters) - The European Union's Brexit negotiator Michel said on Saturday that the will demand "special vigilance" before letting British financial firms access the bloc because of the large risk could pose to the EU's financial stability.

Responding to a report in the Guardian which said he had told lawmakers that he wanted a special deal to maintain firms' access to the City of London, tweeted: "When asked on equivalence I said: would need special vigilance on financial stability risk, not special deal to access the City."

An spokesman said the Guardian report did "not correctly reflect" Barnier's comments to a closed door meeting with members of the European Parliament last week.

officials said the point was making when asked about Brussels' willingness after Brexit to recognise British financial regulations as "equivalent" in rigour to those of the was that, as a lot of business was likely to still pass through the City, equivalence rules would have to be much more tightly drafted compared to those for smaller centres.

The Guardian quoted minutes prepared by parliamentary aides as saying told lawmakers: "Some very specific work has to be done in this area ... There will be a special/specific relationship. There will need to be work outside of the negotiation box ... in order to avoid financial instability."

officials said Barnier, a Frenchman who ran financial services policy, was not speaking of a "special deal" to limit the impact of Brexit on financial services trade between and the but rather emphasising that Brussels would have to take special care not to ignore stability risks in London.

EQUIVALENCE

The officials said he responded to a question on equivalence by noting that the extent of rules governing relations with non-financial centres was proportional to the volume of business conducted in them -- and so to the risk of, say, a bank collapse in destabilising markets on the continent.

With, say, the United States, the has negotiated accords to recognise the "equivalence" of, for example, bank supervision standards to make it easier for European companies to use U.S. banks and let U.S. institutions sell services in the EU.

The extent of such equivalence agreements has been a major concern for British-based banks wanting continued access to the market. Other governments have said they will welcome financial firms moving out of and say Britain's economy and its big services sector must pay a price for Brexit so that it does not inspire voters in other countries to follow suit.

ministers and officials acknowledge that damage to London's global financial centre caused by Brexit will hurt not only but the other 27 states.

"Both the UK and the will suffer," Maltese Finance Minister Edward Scicluna said on Thursday as Malta took on the rotating chair of councils.

"We will lose that efficient centre," he told reporters, forecasting that many financial firms would relocate to various cities in the EU. "That will be a loss ... The will suffer once services are fragmented. It will be longer term."

Nonetheless, Scicluna said, the signs of banks and other City firms preparing to move operations to other parts of the amid uncertainty about the terms of Brexit showed that the immediate cost was much greater for Britain.

(Editing by Angus MacSwan)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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Business Standard
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EU Brexit chief sees special care for financial service ties

By Alastair Macdonald

BRUSSELS (Reuters) - The European Union's Brexit negotiator Michel said on Saturday that the will demand "special vigilance" before letting British financial firms access the bloc because of the large risk could pose to the EU's financial stability.

Responding to a report in the Guardian which said he had told lawmakers that he wanted a special deal to maintain firms' access to the City of London, tweeted: "When asked on equivalence I said: would need special vigilance on financial stability risk, not special deal to access the City."

An spokesman said the Guardian report did "not correctly reflect" Barnier's comments to a closed door meeting with members of the European Parliament last week.

officials said the point was making when asked about Brussels' willingness after Brexit to recognise British financial regulations as "equivalent" in rigour to those of the was that, as a lot of business was likely to still pass through the City, equivalence rules would have to be much more tightly drafted compared to those for smaller centres.

The Guardian quoted minutes prepared by parliamentary aides as saying told lawmakers: "Some very specific work has to be done in this area ... There will be a special/specific relationship. There will need to be work outside of the negotiation box ... in order to avoid financial instability."

officials said Barnier, a Frenchman who ran financial services policy, was not speaking of a "special deal" to limit the impact of Brexit on financial services trade between and the but rather emphasising that Brussels would have to take special care not to ignore stability risks in London.

EQUIVALENCE

The officials said he responded to a question on equivalence by noting that the extent of rules governing relations with non-financial centres was proportional to the volume of business conducted in them -- and so to the risk of, say, a bank collapse in destabilising markets on the continent.

With, say, the United States, the has negotiated accords to recognise the "equivalence" of, for example, bank supervision standards to make it easier for European companies to use U.S. banks and let U.S. institutions sell services in the EU.

The extent of such equivalence agreements has been a major concern for British-based banks wanting continued access to the market. Other governments have said they will welcome financial firms moving out of and say Britain's economy and its big services sector must pay a price for Brexit so that it does not inspire voters in other countries to follow suit.

ministers and officials acknowledge that damage to London's global financial centre caused by Brexit will hurt not only but the other 27 states.

"Both the UK and the will suffer," Maltese Finance Minister Edward Scicluna said on Thursday as Malta took on the rotating chair of councils.

"We will lose that efficient centre," he told reporters, forecasting that many financial firms would relocate to various cities in the EU. "That will be a loss ... The will suffer once services are fragmented. It will be longer term."

Nonetheless, Scicluna said, the signs of banks and other City firms preparing to move operations to other parts of the amid uncertainty about the terms of Brexit showed that the immediate cost was much greater for Britain.

(Editing by Angus MacSwan)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

image
Business Standard
177 22