Probe to look at UK access to EU

British legislators launched an inquiry on Monday into how banks and insurers could maintain access to the EU market after Britain leaves in 2019.

British legislators launched an inquiry on Monday into how banks and insurers could maintain access to the EU market after Britain leaves in 2019.

The House of Lords financial affairs committee said it would examine how regulation and supervision could evolve to ensure financial stability and potentially to maintain some form of close regulatory relationship to preserve access.

The committee’s chairwoman, Kishwer Falkner, said there would need to be co-operation between British and EU supervisors and Britain would need to maintain its influence in global standard setting to maintain market access.

Banks and insurers are already announcing plans to open new subsidiaries in the EU to ensure they can continue serving customers there after March 2019.

With the shape of Britain’s future trading terms with the EU unclear, the sector is focusing on persuading the government to negotiate a transition period to have more time to complete moves to Europe smoothly.

The inquiry will examine the scope for Britain to adopt its own financial rules, after backers of Brexit said that the UK could write its own rules and ditch EU “red tape”. Britain’s Financial Conduct Authority has warned against a “bonfire of regulations” after Brexit.

The committee will also examine whether the EU’s “equivalence” regime is the best way for financial firms in Britain to access clients in the EU after Brexit. This refers to Britain applying financial rules that are similar to those in the EU in return for access, a regime critics say is too unpredictable.

The committee will start public hearings in September and the government will respond to its findings.