Yahoo Finance Bespoke Brexit deal 'achievable' and not cherry picking, City watchdog argues
The head of the City watchdog has attempted to keep bankers' Brexit hopes alive hours after a top European Commissioner shot down plans for a so-called mutual recognition deal.
Andrew Bailey, head of the Financial Conduct Authority, told the City on Tuesday that the mutual recognition model that finance firms want was in fact "the opposite" of cherry picking and remains a possibility.
"Now is the time for the UK and EU authorities to come together and work on the solutions to reduce the risks to financial stability that Brexit could pose," he urged. "Financial stability is far too important to engage in a standoff."
His comments came hours after Valdis Dombrovskis, the top EU official for financial services, told the same audience that Brussels wanted to keep a tight grip over the finance sector through so-called equivalence rules.
However the City is seeking a more bespoke deal as equivalence rules give limited rights, with the EU able to give just 30 days' notice to pull the agreement. Chancellor Philip Hammond last month called the system "wholly inadequate" for the finance sector.
Financial institutions are instead hoping for a mutual recognition approach, where the EU and Britain accept trade with each others’ firms, but have been told by the EU that this was "cherry picking" an agreement.
The new model would replace the passporting rights that finance firms currently enjoy, and would give full access to EU markets but has already been ruled out by Theresa May.
Mr Bailey said it was time for the two sides to "get on with it" and work through the potential Brexit risks together.
"This has global implications, not just for the UK and EU, so it is important that we get this right," he warned.
