The British were the first to crack. On Monday 9 November, just seven weeks before the effective entry into force of Brexit, at the start of 2021, His Majesty’s government announced that it would unilaterally grant several dozen regulatory equivalences to the European Union (EU) in the sector. financial.
Behind the very technical appearance of the announcement, it is a gesture of compromise on the part of the British, which consists in recognizing the European rules in several dozen areas (stock markets, insurance, short sales…). This will allow European firms to continue offering their services to the City, London’s business district.
London has been asking Europeans to do the same for a year now, in vain. The UK is well aware that it has lost the European “passport” which allows it to sell its financial services across the EU. But he hoped to get at least some “Equivalences” regulatory (there are 39 different). The EU regularly uses them to authorize financial products from third countries. For the United States, equivalence is, for example, granted in 23 fields.
Liar poker game
This system is significantly less efficient than the “Passport”, because it can be withdrawn without notice and is unilateral: it is the EU that alone decides whether or not to grant equivalences.
As a member of the EU since 1973, the United Kingdom recalls that it currently follows European rules (which it helped to write) and that it should therefore, technically, receive equivalences automatically. But Brussels has so far refused to grant it, with one exception: the clearing houses, technical but important bodies which serve to regulate the exchange of financial products. “We really had no choice on this file, Europe does not have the capacity to function without the British clearing houses”, analyzes Nicolas Mackel, director of Luxembourg for Finance, the financial lobby of the Grand Duchy. For the rest, Brussels remains unmoved. “It’s regrettable”, retorts Katharine Braddick, director of financial services at the British Treasury.
So London decided to end this game of lying poker and made a move. By announcing it to the House of Commons, Rishi Sunak, the Chancellor of the Exchequer (in charge of finances and the Treasury), did not hide a certain annoyance. “Our ambition was to manage [ces décisions] in cooperation with the EU, but it is now clear that the EU does not want it. (…) In the absence of clarity from [Bruxelles], we decided to act unilaterally to bring certainty to businesses in the UK and Europe. “
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