Banks don’t need to flee UK on Brexit: FCA chief – MarketWatch
LONDON–The head of the U.K.’s financial regulator Thursday questioned whether financial firms need to relocate from the City to maintain access to the EU’s financial markets.
Speaking in London, Andrew Bailey, chief executive of the Financial Conduct Authority, mounted a robust defense of free markets, saying regulators and authorities should not dictate where companies are based.
The comments from one of the UK’s top regulators mark a significant intervention in the debate on the City’s future after Brexit. Big financial firms are drafting contingency plans for Britain’s future outside the single market. Many have indicated they could move thousands of staff into the EU once Britain leaves.
Mr. Bailey questioned whether financial companies required single market access to gain the benefits of free trade with the EU.
“When I hear people say that firms need to relocate in order to continue to benefit from access to EU financial markets, I start to seriously wonder,” he said.
“Does Brexit have to mean abandoning the benefits of free trade and open markets in financial services? It should not. Does it require membership of the Single Market to get the benefits of free trade with the EU? No.”
He said there is “ample evidence that open markets in financial services and free trade can exist safely without common detailed rules and shared regulatory institutions.”
Mr. Bailey explained that the FCA is providing technical advice to support the government in Brexit negotiations, while working with regulated firms to understand their plans for the future. It is also conducting a line-by-line review of EU legislation and rule-making to create a regulatory framework that functions the day after Brexit. He added that there would be no retreat from international engagement or cooperation with other regulators.
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