Europe

Project fear dismantled: City of London rewriting EU rules since Brexit will attract banks

Brexit: Boris Johnson told to 'protect British industry' by host

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The claim was made by Sebastian Siemiatkowski who heads banking firm Klarna, Europe’s most valuable unlisted start-up. Speaking to the Financial Times he said: “As Brexit has happened, it gives London an opportunity to write even better regulations for the financial sector.

“That is going to benefit London standing outside of the EU.

“People expected all the banks will move away, I think it’s the opposite.”

Mr Siemiatkowski argued Brexit gives Britain the chance to become more attractive to fintech and banks, potentially providing a massive economic boost.

After Brexit Britain gave the EU financial sector equivalence, meaning its firms continue to enjoy open access to the UK’s financial markets.

However, Brussels did not reciprocate causing anger in London’s business community.

A recent report by Gerard Lyons, formerly a chief economic advisor to Boris Johnson as London mayor, argued Britain should have a global focus and avoid taking regulation from the “protectionist” EU.

In a paper for the Policy Exchange think tank he said: “The City has suffered from benign neglect, and now needs the government to go into battle for it.

“A vision and strategy is needed for the City.

“The good news is that the tide is now turning in Westminster’s approach towards the City.”

The Global Banking Review reports Brussels is putting pressure on EU banks to move more of their operations from Britain to the continent.

Mr Lyons argued Britain must be ready to diverge from Brussels to compete.

He wrote: “This points to the need to diverge from the EU on financial services regulation when it suits and to make London the attractive venue for parallel markets in euro-denominated instruments.”

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However writing for The Guardian Sir Howard Davies, chairman of the Natwest Group and former deputy governor of the Bank of England, argued Brexit means London’s “Golden Age” as “Europe’s financial capital” is over.

He commented: “It seems likely, therefore, that London will remain Europe’s largest financial marketplace, by a considerable distance.

“But it will no longer be the continent’s de facto financial centre.

“For the EU, London will shift from being its principal onshore financial centre to an important offshore centre.

“Other cities will pick up business, though the signs are that a multipolar system will develop, with no single winner.

“There will still be a profitable role for London, but the Golden Age of the City as Europe’s financial capital will recede.”

Britain formally left the EU in January 2020 following several parliament-imposed delays.

The impact was limited until the end of December when the UK remained in a Brexit transition period.

During this time Britain continued to be a member of the European single market and implemented many laws made by Brussels.

This has now been replaced by Boris Johnson’s new trade deal which restored Britain’s position as a fully independent trading nation.
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