Brexit ‘Rules of the Game’ Urgently Needed, U.K.'s Bailey Says

(Bloomberg) -- U.K’s financial regulator said British and European Union negotiators need to undertake “a big debate” over post-Brexit oversight to allow for open markets and resolution of disputes.

Officials must reach “a common agreement on some rules of the game,” U.K. Financial Conduct Authority Chief Executive Officer Andrew Bailey said Tuesday at Bloomberg’s London office. “And there should also be a mechanism for dealing with disagreements.”

Brexit ‘Rules of the Game’ Urgently Needed, U.K.'s Bailey Says

While the FCA takes no position on the substance of Brexit, Bailey said the U.K. should push to avoid “cliff-edge risks” of a no-deal departure from the EU. As U.K. politicians struggle to agree on Brexit terms, Britain and the EU have been rolling out contingency plans to ensure the smooth continuation of banking and trading.

While both sides have to agree on a way to cooperate, Bailey said that British regulation unfettered by EU supremacy would probably differ from the current system.

“It would take on board practical experience more rapidly and it would be based more on principles that emerge from experience in public policy and somewhat less on detailed rules that can tend to become overly set in stone,” he said. “Left to our own devices,” the U.K. with its common-law system and large global financial markets would construct financial-conduct regulation in a different way.

Whatever happens, the U.K. and EU markets will remain closely linked, he said.

“Whenever we go with the withdrawal agreement, particularly for us in financial services, we’ve got to then be ready to have the big debate, which is around what the future relationship looks like,” Bailey said.

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