On 21 June 2018, HM Treasury and the Bank of England (BoE) published the speeches given by the Chancellor of the Exchequer and the Governor of the BoE at the Mansion House. Both speeches covered financial services and Brexit.
In his speech the Chancellor of the Exchequer mentioned that the UK Government is not yet at the stage of formal negotiations on financial services. He also added that there has been a mixture of views in the EU on the UK Government’s position on mutual recognition with the European Commission in particular arguing that the only possible route for financial services access is through existing equivalence arrangements. The Chancellor also noted that there is now a debate in Europe about ‘enhanced equivalence’ but rejects this on the basis that he has yet to see a credible proposal as to what it might mean or a clear articulation of how it might work.
In his speech BoE Governor, Mark Carney, stated that major UK banks now have the balance sheets to withstand a disorderly cliff-edge Brexit, however unlikely that may be. He also stated that t financial services could serve as a template for broader services trade liberalisation and that taking this road could help solve the problem of persistent trade imbalances. Mr Carney also told the Mansion House audience that the BoE still believed it was both feasible and desirable to base the future financial services relationship with the EU on “commitments to achieving equivalent outcomes”.
A couple of days before the Mansion House speeches the UK Government and the Commission published a joint statement outlining the progress made in the Article 50 negotiations. Michel Barnier will present the state of play of the negotiations to the European Council which takes place on 28 and 29 June 2018 and to the European Parliament.