U.S. AND UK BANKS DIVIDED OVER BREXIT
British lenders and Wall St rivals clash over EU’s ‘regulatory equivalence’ arrangement
WITH just seven weeks to go before Brexit, it’s not just United Kingdom politicians who are bitterly divided over the country’s withdrawal from the European Union (EU) — large banks are also at loggerheads.
British lenders and their Wall Street rivals are pushing widely different views on Brexit, a clash that was highlighted at a meeting last week with UK government officials, said sources.
While United States banks wanted Britain to maintain the closest possible ties with the EU after Brexit, UK banks and insurers were anxious about becoming beholden to new laws made by Brussels, said sources.
British banks have had to lower expectations of how they’ll do business with the EU after Brexit.
The UK government dropped its initial demand that they retain easy access to the single market.
Instead, the country’s financial industry will have to make do with the same framework available to other non-EU countries, an arrangement commonly known as “regulatory equivalence”.
Under the Norway-style Brexit deal that some politicians are advocating, the UK will be subject to a number of rules, such as the General Data Protection Regulations that cover firms holding EU residents’ personal data.
British banks would be required to adhere to any changes in the rules even though UK politicians would no longer have a say in how they evolved.
However, many US banks were unfazed by the Norway model because they already essentially were seeing themselves as ruletakers, said sources.