This has been the most asked question across the Channel since Shakespeare’s “to be or not to be”. Losing its passporting rights means that London as the financial hub of Europe is over. The first signal was the moving of the European Banking Authority to Paris. Now the next round of talks concerns the access of the EU Market.
According to EU’s chief Brexit negotiator, Michel Barnier, negotiations are about trade and not financial services. It was highlighted that checking goods once they go through customs is easier compared to identifying the nature of financial services. What could benefit the UK is the approach adopted during the CETA talks with Canada. However, to achieve such accomplishment years of negotiations were required.
It should be noted that although CETA addresses financial services, it will not allow Canada to have “passporting rights” in the EU. That said, the UK will not have them either. While the British side believes that the status quo should suffer only some sort of downgrade, the EU negotiators would like to see the whole relationship re-built from bottom-up.
This chapter of Brexit talks is in stalemate as the British government stated last week that it will not pay the EU to have access to the market.
Leaders of the private sector are promoting a gentle approach, such as a transition period. These same leaders used to risks are also betting on alternatives. In order to be able to offer their financial services in the continent, their companies have begun applying for banking licenses in other European countries.