Germany Seeks to Keep Post-Brexit Ties to U.K. Markets Cop

(Bloomberg) -- British and European markets watchdogs may wrap up a comprehensive deal that protects cross-border securities trading after Brexit. But the Germans aren’t betting on it.

Germany is laying plans to open its own direct links to the U.K.’s Financial Conduct Authority in case fellow European countries fail in their efforts to reach a joint deal. Regulator BaFin is looking at fall-back options “to ensure as friction-free a transition as possible,” said the regulator’s vice president, Elisabeth Roegele. That goes further than statements from France, which has signaled that it’s relying on a joint pact.

London is the European Union’s largest financial center, and regulators on both sides of the channel are working to prevent market turmoil when the country leaves the bloc. Germany, Europe’s biggest economy, is taking an increasingly pragmatic approach to supervision as the clock ticks down and politicians in the U.K. and rest of the EU have yet to reach a wider withdrawal agreement.

Roegele said that like France, she supports efforts by the European Securities and Markets Authority to reach a multilateral deal between the FCA and EU regulators. That should cover how the watchdogs will supervise financial firms that delegate responsibilities and transfer risk between their units in the U.K. and the EU, she said in emailed comments to Bloomberg.

“A commitment to transparency, market integrity and investor protection serves the smooth functioning of financial markets and stability,” Roegele said.

Her stance is more cautious than that of France’s top markets supervisor, Robert Ophele. The chairman of the Autorite des Marches Financiers said at a conference in London earlier this month that the financial industry should make its plans under the assumption that European regulators will reach a joint pact with the U.K.

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