BoE calls on lenders to seek regulatory approval before relocating to EU
The Bank of England is calling on lenders to seek its approval before relocating to the EU after concerns European regulators are demanding more to move than necessary.
The central bank is concerned the European Central Bank’s requests are excessive, the Financial Times reported, and Governor Andrew Bailey has reportedly taken a personal interest in the issue.
The stance has been criticised as regulatory “over-reach” by international bankers. UK politicians and regulators have been concerned their European counterparts would try to poach financial services firms after Brexit and are concerned about the loss of both jobs and tax revenue.
“Being told in advance of banks’ plans is one thing, but requiring regulatory approval first is quite another,” one senior adviser to a US bank in London told the FT.
The bank’s stance risk worsening the already unstable relationship between the UK and EU amid negotiations over a post-Brexit agreement on financial services.
Brussels can grant direct market access for foreign financial services firms if it deems their home market rules are similar to the EU’s own standards, a designation known as equivalence.
Last Friday the two parties announced they had agreed the terms for future cooperation on financial services.
“The MoU, once signed, creates the framework for voluntary regulatory cooperation in financial services between the UK and the EU. The MoU will establish the Joint UK-EU Financial Regulatory Forum, which will serve as a platform to facilitate dialogue on financial services issues,” The Treasury said.