Britain and the European Union are on course to agree a deal on regulatory cooperation in financial services this month, but the UK’s actions in Northern Ireland makes it harder to build trust, the bloc’s financial services chief said on Thursday.
“We are on track,” Mairead McGuinness told a Politico event.
The British government unilaterally extended a grace period for checks on food imports to Northern Ireland, a move Brussels said violated terms of Britain’s divorce deal.
“Things like that don’t help build trust,” McGuinness added.
Britain’s trade deal with the EU from January does not cover financial services, leaving the City of London largely adrift from what had been its biggest export customer.
Swathes of trading in euro shares and swaps have left London for the continent, with Brussels now targeting clearing of euro trades, raising hackles at the Bank of England.
Brussels has granted only limited direct access for the City of London under its “equivalence” system.
“It’s really important to say that when we sit down with the United Kingdom following an agreement on the memorandum, it’s not to do a package deal within a short space of time which might recreate access to the single market,” McGuinness said.
“There isn’t a bundle of equivalence possibilities that are suddenly on the table…We will rather look at each one when it requires us to do so.”
There were still gaps in information provided by Britain on its intentions to diverge from EU rules, she said.
Britain has just announced plans to ease its listings rules and to make itself more attractive for fintech firms to compete better with the EU, United States and Asia.
“Clearly anything like that would feed into our decision making,” McGuinness said. “If we grant equivalence, we have to make sure it’s future proof.”
Britain’s finance minister, Rishi Sunak, told the Bank of England on Wednesday to be creative in keeping the City of London competitive after Brexit.
“I wouldn’t like to see the United Kingdom ripping up regulation,” McGuinness said.