Britain confident in "next" Brexit deal for financial sector

LONDON (Reuters) – The United Kingdom is confident that it is about to reach an agreement with the European Union to give London's vast financial center access to European markets after the Brexit, announced Monday the British Minister of Financial Services, John Glen.

Home to the largest number of banks in the world and the largest commercial insurance market, the City of London and its sister neighborhood, Canary Wharf, are scrambling to prepare for the departure of Britain from the United States. European Union, the biggest challenge facing the UK financial sector since 2007 – Financial Crisis of 2009.

The UK financial services sector, which represents the largest source of exports and tax revenues, is striving to find a way to preserve the existing trade flow after leaving the EU.

The government is seeking to improve the existing EU system for access to financial markets, called "equivalence" – a fundamental form of market access based on the maintenance of similar rules and on the basis of EU relations with countries such as the United States. .

"I am extremely confident that we will reach an imminent agreement," Glen said at a conference on financial services in London. "There is a common ground. This is why we are increasingly optimistic in the hope of reaching an agreement. "

The talks on a wider deal are entangled in a disagreement over an Irish "backstop" – an insurance policy guaranteeing that there will be no return to a hard border on the US dollar. Isle of Ireland if a future business relationship is not in place on time.

But negotiators are on the verge of agreeing on financial services wording that would go into a statement on future relations, to be included with any divorce deal, according to British officials.

Glen said EU politicians were increasingly fearful of being cut off from UK financial markets because all other financial centers in Europe are smaller.

"Cutting ties with our financial center is not in the commercial interest of any other European capital. It is fair to say that the vast majority of European politicians share the same point of view, "he said.

NO APOCALYPSE NOW

Glen also told the City & Financial conference that dire warnings about hundreds of thousands of jobs leaving the city as banks and insurers open new centers in the block in anticipation of Brexit in March have only come to an end. not materialized.

"Job losses have not been to the apocalyptic proportions predicted by alarmists," Glen said.

James Bardrick, who heads Citigroup's operations in the UK, said he would continue to plan a tough Brexit until Britain reaches an agreement.

"We have done it largely. We have the arrangements in place that would allow us to continue serving our customers, "Bardrick told the conference.

Britain has done everything in its power to avoid disrupting the financial markets if a Brexit without an agreement is held next March, Nausicaa Delfas, executive director for international affairs at the Financial Conduct Authority, told Reuters Britain, on the sidelines of the conference.

While the EU has indicated that it could take steps to avoid any disruption in derivatives clearing, the bloc must do more in the event of Brexit without agreement, including ensuring that financial data continue to circulate across the Channel, she said.

She hopes that a memorandum of understanding between UK and European regulators will be put in place "as quickly as possible" so that asset managers from London and Edinburgh can continue to manage listed funds, a cross-border plan known as a delegation.

"To the asset managers present in the room, I want to assure you that the burning problem of portfolio delegation will be resolved," added Glen.

Financial Services The Brexit's "Do not Agree" plans developed by the block are reluctant to deal with other areas of potential disruption, such as the continuity of insurance contracts. and over-the-counter swap agreements.

Delfas said the EU needed to decide what measures to take, but that national regulators from the member states could act on their own to avoid any disruption in contracts, such as insurance contracts.

Stephen Jones, head of the UK banking lobby, UK Finance, said he was "skeptical" about an agreement on financial services, saying the current framework would depend on broader trade negotiations between the US and the UK. EU and the United Kingdom, which have not yet started seriously.