15 February 2021. LONDON (Reuters) – Eurosceptic British politicians and financial sector veterans have set up CityUnited, a new think tank they say will promote a globally competitive financial sector after a “protectionist” EU shut its doors to the City of London after Brexit.
Britain’s huge financial sector no longer has unfettered access to its hitherto biggest export customer after the UK left the EU single market on Dec. 31. The trade deal with the EU does not cover financial services.
Euro share trading has left the City of London for the EU, helping Amsterdam overtake Britain as Europe’s biggest share trading centre. That has rung alarm bells, piling pressure on Prime Minister Boris Johnson’s government and regulators to respond.
The government must now accept that the EU has effectively denied normal cooperation with the City, CityUnited said in a statement tweeted on Monday.
“New opportunities are opening up to secure the City’s global leadership in regulation and product development,” Daniel Hodson, chairman of the CityUnited project, said.
He said there is a “massive chance” to enhance the UK’s global leadership role in financial regulation in contrast to the “increasingly protectionist financial markets in the EU”.
The EU says it wants to deepen its own financial market to end reliance on the City of London, and won’t grant access until Britain spells out its intentions to diverge from financial regulation inherited from the bloc.
Hodson was a CEO of London’s LIFFE futures exchange, now part of ICE, and the think-tank project is also backed by several lawmakers including ex-finance minister Norman Lamont.
Hodson said UK financial services should be supported by a “fair and competitive” regulatory and taxation framework.
Bank of England Governor Andrew Bailey also criticised EU conditions for financial market access last week, but he ruled out a “low-regulation, high-risk, anything-goes financial centre”.
City of London political leader Catherine McGuinness told Reuters last month there is no appetite for a “bonfire of regulation” as a way of boosting competitiveness.