“The EU cuts us off from the markets” – Corriere.it

The Bank of England charges the European Union: they want to cut the City out of the continent’s financial markets, says Governor Andrew Bailey. And, he adds, it would be a serious mistake, with serious consequences for everyone. In a speech addressed to financial and professional services, Bailey argued that the EU is trying to impose stricter rules on Britain than those required of other partners, such as Switzerland or the United States: conditions that he believes would be unacceptable. if imposed on Europeans themselves.

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“Is the EU trying to cut the UK out? – Bailey reflected – At the moment there are signs of the intention to do so. But I think it would be a mistake, it would lead to the fragmentation of the markets: and the problem of the fragmentation of the markets is that it raises the costs for everyone, including, among other things, European citizens ”. The fear is that the lack of access for the City to the continent’s finance could drive up the costs of mortgages and insurance both in Great Britain and in Europe and that it will lead to an increase in the costs of currency transactions for companies that have international exchanges. The Brexit agreement reached in extremis at the end of December only covers goods: for finance and services in general, Britain’s exit from the EU was in fact a no deal, a divorce without agreements. The only thing the City can get, in order to continue operating in Europe, is an equivalence regime, negotiated sector by sector: but Brussels is putting its foot down and in any case it would be an arrangement that can be revoked with minimum notice.

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“I fear that a world where the EU dictates and determines what rules and standards we have in the UK will not work,” said the Governor of the Bank of England. The problem, however, is that the City would like access to European markets, while reserving the right to diverge from their regulations: Bailey himself admitted that a financial center the size of the City must be able to set its own rules, even within a framework world. But in the meantime the consequences of the fracture are already being felt. In January, Amsterdam overtook London as the largest trading center for European equities: shares were traded on the Dutch market for a value of € 9.2 billion per day, against the City’s 8.6 billion. Brussels banned European companies from trading stocks in London, forcing them to migrate to other financial centers. However, the City remains the dominant center in the world for currency and derivatives trading.

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