Britain faces choice over post-Brexit rule-setting freedom, BoE candidate says
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LONDON, Jan 13 (Reuters) - Exploiting Britain’s freedom to set its own rules could constrain access to the European Union’s financial market, said a candidate for the Bank of England’s supervisory arm.
Britain left the EU’s orbit on Dec. 31 but a trade deal with the bloc does not cover financial market access, which is being handled separately under the EU’s equivalence regime.
“Taking advantage of the freedoms available in leaving the EU may be constrained by the desire to have the UK regime recognised as equivalent,” said John Taylor in a hearing in parliament on his candidacy for the BoE’s Prudential Regulation Committee.
Britain and the EU began talks this week to agree on a memorandum of understanding that will allow regulators from both sides to cooperate.
Taylor, a former marketing director at Lloyds bank who has also held several roles at Standard Life, said: “One would hope that further dialogue with the EU in these areas will result in the UK regime being accorded equivalence by the EU in the near future.”
The EU has granted access to clearing houses for derivatives in London, but only for 18 months to give banks time to shift positions from Britain to the EU.
“However, the criticality of these instruments and the temporary nature of the equivalence agreements means this will need ongoing attention until a more enduring settlement is reached,” Taylor said.
BoE Governor Andrew Bailey said last week that Britain should not become a “rule taker”, meaning having to copy EU rules in detail in order to have access. (Reporting by Huw Jones; Editing by Alison Williams, William Maclean)