Brexit and financial services
Financial services constitute an important net export for the UK economy, for which the rest of the EU is the largest market. This paper considers the likely consequences of Brexit for this sector. A ‘soft’ Brexit, whereby the UK leaves the EU but remains in the single market, would be a lower-risk...
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| Format: | Journal article |
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Oxford University Press
2017
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| _version_ | 1797073446593626112 |
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| author | Armour, J |
| author_facet | Armour, J |
| author_sort | Armour, J |
| collection | OXFORD |
| description | Financial services constitute an important net export for the UK economy, for which the rest of the EU is the largest market. This paper considers the likely consequences of Brexit for this sector. A ‘soft’ Brexit, whereby the UK leaves the EU but remains in the single market, would be a lower-risk option for the City than other Brexit options, because it would enable financial services firms to continue to rely on regulatory passporting rights. Under a ‘hard’ Brexit scenario, where the UK leaves the single market, the UK might in principle be able to benefit from the EU’s third country ‘equivalence’ frameworks for financial services, but these are cumbrous and incomplete alternatives to passporting. UK firms would find it considerably more costly to export to the EU. This would also be a loss to the EU27, because the UK specializes in capital markets services for which the EU, over-reliant on banking, recognizes a need. However, much of this ‘UK’ activity is provided by subsidiaries of US-headquartered groups. In the event of hard Brexit, these firms may be able to compete just as effectively from New York as from London. If soft Brexit proves politically impossible, it seems highly desirable that the UK push for a transition period of continued EU membership pending at the very least completion of equivalence determinations and, more usefully, the conclusion of a suitable bilateral agreement. |
| first_indexed | 2024-03-06T23:22:16Z |
| format | Journal article |
| id | oxford-uuid:6922312b-0758-40d6-b3f5-c16fc8a95470 |
| institution | University of Oxford |
| last_indexed | 2024-03-06T23:22:16Z |
| publishDate | 2017 |
| publisher | Oxford University Press |
| record_format | dspace |
| spelling | oxford-uuid:6922312b-0758-40d6-b3f5-c16fc8a954702022-03-26T18:49:25ZBrexit and financial servicesJournal articlehttp://purl.org/coar/resource_type/c_dcae04bcuuid:6922312b-0758-40d6-b3f5-c16fc8a95470Symplectic Elements at OxfordOxford University Press2017Armour, JFinancial services constitute an important net export for the UK economy, for which the rest of the EU is the largest market. This paper considers the likely consequences of Brexit for this sector. A ‘soft’ Brexit, whereby the UK leaves the EU but remains in the single market, would be a lower-risk option for the City than other Brexit options, because it would enable financial services firms to continue to rely on regulatory passporting rights. Under a ‘hard’ Brexit scenario, where the UK leaves the single market, the UK might in principle be able to benefit from the EU’s third country ‘equivalence’ frameworks for financial services, but these are cumbrous and incomplete alternatives to passporting. UK firms would find it considerably more costly to export to the EU. This would also be a loss to the EU27, because the UK specializes in capital markets services for which the EU, over-reliant on banking, recognizes a need. However, much of this ‘UK’ activity is provided by subsidiaries of US-headquartered groups. In the event of hard Brexit, these firms may be able to compete just as effectively from New York as from London. If soft Brexit proves politically impossible, it seems highly desirable that the UK push for a transition period of continued EU membership pending at the very least completion of equivalence determinations and, more usefully, the conclusion of a suitable bilateral agreement. |
| spellingShingle | Armour, J Brexit and financial services |
| title | Brexit and financial services |
| title_full | Brexit and financial services |
| title_fullStr | Brexit and financial services |
| title_full_unstemmed | Brexit and financial services |
| title_short | Brexit and financial services |
| title_sort | brexit and financial services |
| work_keys_str_mv | AT armourj brexitandfinancialservices |