LONDON (Reuters) – Making the current system of European Union market access for non-members more workable is Britain’s best bet after Brexit as the more ambitious alternative sought by banks is unrealistic, Luxembourg’s finance minister told Reuters.
Britain’s financial sector, with backing from the government, wants two-way market access based on Britain and the EU accepting each other’s banking rules to avoid damaging the UK economy’s most important sector.
Bespoke - Recognition - Trade - Agreement - Support
But such a bespoke “mutual recognition” trade agreement has never been agreed before and has found little support in Brussels so far.
Luxembourg Finance Minister Pierre Gramegna said the way forward was to revamp the EU’s current “equivalence” system to cope with a global financial center on its doorstep.
Equivalence - Refers - Brussels - Market - Access
Equivalence refers to Brussels granting market access to foreign banks, clearing houses, fund managers and insurers if their home rules are in line with the bloc’s. It is used by financial firms in the United States, Singapore and elsewhere.
Britain has rejected it, saying it is one-sided, patchy and access can be withdrawn at a month’s notice.
Gramegna - Luxembourg - France - Equivalence - Regime
Gramegna said Luxembourg and France wanted to explore how the equivalence regime could be “enhanced”.
“If equivalence plays a much bigger role than it plays today then we need enhanced equivalence, that means putting on the table how does this equivalence work,” he told Reuters during a visit to London.
Procedure - Sides - Dialogue - Transparency - System
“It’s about making the procedure such that both sides can live with it, and that there is enough dialogue and transparency in the system,” Gramegna said.
“You can take away equivalence at short notice, and that is a problem as it does not...
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