Brexit Talks on Banks’ Access to EU Have Paused, Frost Says
(Bloomberg) -- Talks to give U.K. financial services firms access to the European Union’s single market after Brexit have been put on hold, according to a government minister.
“We hope that it will be possible to pick that up and move this forward,” Brexit Minister David Frost told the House of Lords on Thursday. “Some of the equivalence decisions are now imminent, if not quite urgent.”
Financial services were excluded from the post-Brexit trade deal that came into effect at the start of 2021, meaning London-based firms have had to move billions of dollars of assets and thousands of staff to be able to continue operating in the bloc.
Earlier this year, the two sides made progress on a largely symbolic memorandum of understanding, which set out a framework for regulatory cooperation and a joint forum for discussing rules and procedures as well as the sharing of information. That memorandum is seen as a key step toward a separate decision on equivalence -- a series of unilateral rulings that each side can make that offer market access to financial services.
“There’s a provision to agree an MOU” under last year’s Brexit trade deal, Frost said. “There were discussions earlier this year, at the start of this year, to provisionally agree that text. Those discussions have paused, again for reasons that we’re not 100% clear about, but can speculate on.”
A spokesperson for the European Commission said that with regards to the MOU “internal procedures are still ongoing.” The bloc’s commissioner for financial services Mairead McGuinness said in November that she would propose an extension of equivalence for U.K.-based clearinghouses in early 2022 but there’s been little indication of movement on any other areas where the U.K. is waiting on a decision from the EU.
Relations between Britain and the EU have deteriorated in recent months as the U.K. government threatened to rip up part of the Brexit deal relating to Northern Ireland.
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