A Brexit Reset for the City of London?

Graham Bishop and Brendan Donnelly discuss the possibilities for a reset of relations in the financial sector between the UK and EU. They conclude that these possibilities are limited, given the commitment of the EU to retaining the greatest possible financial control within the euro area.

SPEAKERS
Brendan Donnelly is the Director of the Federal Trust and a former Conservative MEP.

ABOUT THE FEDERAL TRUST
The Federal Trust is a research institute studying regional, national, European and global levels of government. It has always had a particular interest in the European Union and Britain’s place in it. The Federal Trust has no allegiance to any political party. It is registered as a charity for the purposes of education and research.

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[peg]

No cherry picking, out is out, extreemly arrogant...

[verttikoo]

1:45 ‘UK would like the City to continue to be the financial center of the EU’. Really?? WE 🇪🇺 don’t.

[uweinhamburg]

How likely is it that EUrope will grant London any special status? A part of a third country full of activities which most EUropeans see as nothing but criminal?

No way - to answer my own question! Out means out!

[johnjeanb]

There is no hesitation nor nervousness on the part of the EU regarding the City. "We have a bedrock of shared values" Really? You are joking right?
NO, the UK is independant to pursue its own politics and there are NO binding terms to force the UK to abide by these "shared values", so quite naturely the EU is pursuing its plan to recommend EU nations to repatriate all financial activities into the EU and this is planned for June 30, 2025.
Why this unlikely to change? It is in the best interests of the EU to have those critical financial services carried out by bodies under the clear jurisdiction of the EU. In lemmons terms it is about giving preference to family (EU) and minoring the role of a third country which did not hesitated in the past to renege on its commitments. Pure and simple.

[ybkseraph]

Clear and correct analysis - EU clearing will move to EU member states.
In the meantime City can do the job.
All this is only going one way 😊

[TILHUG-nu]

Instead of rejoin you should say (re)apply to join

[JohnnyinMN]

As an American auditor, this was part of leaving the E.U. Britain is no longer in the E.U. and still conducts questionable transactions per U.S. and E.U. standards. You don’t have proper regulations and it’s reasonable that the E.U. wants to conduct their own transactions. This will greatly harm the London financial industry.

[SonOfViking]

A Rubicon was crossed only last month in the EU's strategic commitment to acquiring autonomous control over its own capital management, particularly from systemic CCPs hosted within various third country markets, and it is no coincidence that the financial minister of the third country most immediately and profoundly affected was "invited" to the first convention of European financial ministers to be held since this development came into effect.

Her presence was all the more necessary, it was felt within the EU, primarily because her apparent unwillingness to acknowledge this development openly, and an almost completely similar reluctance to address it within the UK media, its financial forums, and most certainly among the UK public, suggested either a cynical or ignorant refusal to admit its ramifications for the UK as a third country - something which itself could actually contribute to serious malfunctions within the market which, because of what the City is, could potentially extend to all relevant actors within that market, including the EU. This would be in no one's interest, including of course the UK itself.

The redrafting of EMIR, including the now legal requirement for all relevant market participants to have an active account with EU CCPs if they wish to continue trading in European derivatives, currency clearing, etc, is the first of several such steps set to come into effect between now and 2027 in which encouragement and incentive give way to compulsion and City traders, whether ready or not, will now have to make an immediate decision either to abandon European clearing and trade or finally to begin the fundamental relocation of their activities to within the EU. It's that simple, that profound, and yet is hardly being discussed or reported at all within the UK. Reeves, it was hoped, might care to explain this silence - or better still commit to facilitating this transition, with which she has no choice but to comply, in a managed way that carries least risk to the stability of the market she ostensibly "controls".

If she is mulling over how best to break this "news" to her own public she is certainly taking her time over it since she came back from that meeting (her attendance instead being presented as some kind of "breakthrough" in UK-EU relations!) - and this in fact has also been noticed and commented upon by various European politicians, commentators and news media since that meeting. It seems to be yet another example of UK delusionalism - once more simply ignoring realities that don't suit either the establishment or the public to acknowledge.

In the meantime those realities, especially in the form of further legislation to forcibly transfer all liabilities, functions and outcomes of euro-related trading completely to EU control will continue as planned, whether the UK chooses to engage with reality or not - and judging by some of the comments already posted here by UK citizens it would appear not.

[grahambishop]

This is a rather unhappy comment on the chances of an effective reset of relations between the EU and the UK for financial services - the City in shorthand. Sadly, I believe hopes of a major improvement are doomed as the plans will inevitably founder on the rock of derivatives clearing.

[jackiekuforiji]

Thank god some of us can afford to leave this country. Feel so sorry for those who can’t.

[alexanderromanov]

I have heard that the new UK government wants to do a deal with the EU to try to improve the future for the London Laundramat, the now almost defunked chemical and testing industry, what's left of the motor manufacturers and some of the poor people who can never, under any circumstances become better off as they only speak one language behind a self built iron curtain, separating them from civilisation, fresh fruit and stress relieving holidays in the sun.
Usually when negotiating, both parties have something the other wants. The negotiation, is the coming to an agreeable compromise in exchange together. As the entire planet sees this situation, the European Union has a market of 450 million healthy, wealthy, educated, ordered, motivated, well protected, multi lingual customers, that occupy a continent with excelent infrastructure, tourist attractions and vibrant, commercial cities, wonderfull social welfare arrangements, universal healthcare, natural resources, an intercooperational living, working regime and a high, speed long distance, rail line opening up every week, and, on top of all that, the EU has advantageouse trading arrangements with all other important countries and groups worldwide to offer.
On the other hand, the United Kingdom has a unicorn flavoured magic bean and a beautifully coloured flag.

So, obviously the European Union should be feeling under a great deal of stress, and probably worried that the new, nice but almost as dim, government may use the highly experienced negotiator quarterwit with white hair and no pencil or notepad, that the Liar in Chief installed in his cabinet after the dancing Priministress, from the more Brexit is Brexity government. I wonder how long it will take the EU to fold?

[verttikoo]

What the hell are you people talking about??? We 🇪🇺 are getting rid of the Casino of London. The date when the UK is fully out from the Single Market is 1.7.2025. Then the last freedom, freedom of movement of capital is gone. WE ARE NOT GOING TO LET SOME RANDOM THIRD COUNTRIES TO DECIDE ANYTHING WHAT COMES TO OUR CURRENCY 💶 BE SURE ABOUT IT. You people are so freaking delusional 😠

[aukebij]

the eu doesn't need the city of london all euroclearings must be out of london by january 1st 2026.
so it's not long term it's short term

[dooley-ch]

Well BREXITEERS you may rest peacefully in your beds so long as people like Brendan Donnelly and Graham Bishop are leading the rejoin movement, because every time they open their mouths all the do is demonstrate who wholly unsuitable they are for EU membership. Not once have I ever heard Brendan Donnelly make a comment that would suggest that he understands what is expected of potential EU member - how about meeting the democracy requirements for instance, like a written constitution, a constitutional head of state etc....

[kenroberts]

Oh god what a great decision to leave the EU. More reviews like this please, the more we know the worse it gets.

[JamesWilliamson-wy]

The UK does not need a Brexit reset. It needs a Brexit Implementation.

[muhammaduddin]

Join the gym membership.No membership no benefits simple as that.

[aukebij]

it is quite simple it was already decided last year that the euro clearing would be withdrawn but starmer thought he could still turn it around he went to brussels on his bare knees and got a no to the request. and that is how it should be eu money matters do not belong in a non eu country according to calculations of the world bank the deficits of the uk will increase to a hundred ninety to two hundredbillion with this the uk runs the risk that it can no longer pay its interest and repayments and that there will be a general loan freeze in other words the uk is bankrupt

[andrewblewett]

It’s a mess isn’t it? So the City is surviving on inertia but has no long term future as an ersatz European financial centre. I would like to see the UK back in Europe and joining the Eurozone - but no illusions about how easily this can be achieved given the combo of rampant populist nationalism and whatever Farage has in mind for the relationship with Republican USA after the next GE which he presumably plans to win as leader of a Reform Tory party. A nightmare. It really is hard to see how the current UK gov strategy can work. Such is their commitment to the will of the people @2016 that it’s in danger of pleasing no one. Who on earth voted Leave for all this? 10%? I’m pretty sure that Leave won in order to “save the NHS from Brussels” and to prevent 70 million Turkish citizens moving to South London. What a load of nonsense that was. Lies lies lies…

[ncooper]

The city. So what about the rest of the country, doesn't that matter?