FCA Chief warns that Brexit negotiations continue to ignore Financial Services
May 2019
The esteemed Chief Executive of the Financial Conduct Authority (FCA), Andrew Bailey, has today reiterated previous warnings that ongoing Brexit negotiations between the UK and the European Union (EU) continue to ignore the financial services industry. Bailey has previously highlighted the importance of preserving open financial markets while upholding international standards, and today reaffirmed the lack of attention being given to define the ongoing relationship between the UK and the EU for one of the UK's largest industries.
The latest coverage of cross-party negotiations report a continued inability from both sides to make any significant progress. The Government has faced much embarrassment since missing several deadlines to deliver the UK's exit and public frustration has grown after Downing Street admitted that the UK will need to participate in this month’s European Parliament elections despite previous statements to the contrary. Labour continue to push for a permanent customs union, something that continues to cause problems for Prime Minister May within her own party. But Andrew Bailey today raised that while cross-party negotiations continue to focus on a customs union, any resolution to be found continues to omit agreement over the trading of services, something Bailey says needs to be settled "well before negotiation" with Brussels.
The UK leads Europe's financial services industry and concern within the sector about the UK's departure has centred on ensuring a smooth transition with mutual recognition between both sides, with both Bailey and current Bank of England Governor, Mark Carney, stressing the importance of ensuring the UK does not become a rule-taker in a post-Brexit world. Mutual recognition is intended to give the UK and the remaining EU member states the freedom to set their own rules subject to the outcome of such legislation remaining broadly similar for either side. By lowering the burden of the existing regulatory regime, Bailey has argued that the UK could benefit from establishing a more flexible, principles and outcome-based regulatory system.
Bailey is tipped as favourite to takeover from Bank of England Governor, Mark Carney, later this year. Having been appointed as Chief Executive of the FCA in 2016, Bailey is viewed as the "strongest of the internal candidates" for the post having also served as Deputy Governor of the Bank of England, with many praising his knowledge and experience of the UK economy. Candidates have six weeks to apply for the £480,000 job ahead of an Autumn appointment. In the meantime, the market will watch Bailey's post-Brexit vision closely for hints of what may be to come.