UK and EU co-operation on financial services a ‘turning point’, says Hunt
Chancellor Jeremy Hunt and European Commission financial service chief Mairead McGuinness signed a memorandum of understanding in Brussels.
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Your support makes all the difference.The UK and European Union have signed a deal to work closer together on financial services regulation in the latest sign of a post-Brexit thaw in relations.
Brussels’ financial services commissioner Mairead McGuinness said it was “fair to say we have turned a page” in the relationship.
The memorandum of understanding (MoU) signed by Ms McGuinness and Chancellor Jeremy Hunt will see greater co-operation between officials from the EU and the Treasury.
Speaking alongside the Chancellor in Brussels after signing the memorandum, Ms McGuinness said the Windsor Framework deal to address concerns over Northern Ireland had helped smooth relations between the UK and EU.
“This has allowed us to move forward in a spirit of partnership, based on trust, co-operation and delivering benefits for people on both sides.
“This MoU we’ve just signed is one example of the benefits of partnership.”
The “structured co-operation” set up under the new arrangement will allow officials to discuss regulatory changes, international developments and risks to financial markets.
Mr Hunt said the signing of the memorandum was an “important turning point”.
He said it was “not the end of a process but the beginning” and the co-operation would “make a real and tangible difference” in both the UK and EU.
Mr Hunt said that the memorandum of understanding would help to support the UK and London’s role as a hub of financial services around the world.
The sector makes up more than a tenth of the British economy, being worth more than a quarter of a trillion pounds last year.
However, EU officials stressed the memorandum would not restore access to the single market or prejudge decisions on equivalence, where one side recognises the other’s regulations.
The Treasury said that the memorandum will allow the parties to “coordinate positions where appropriate on issues ahead of G7, G20 and other international meetings”.
The agreement is the latest sign of the bond between the UK and EU being repaired following the difficult period of negotiations under Boris Johnson.
Rishi Sunak and European Commission president Ursula von der Leyen have a warmer relationship, which helped steer through the Windsor Framework aimed at addressing difficulties with the Northern Ireland Protocol.
Mr Hunt’s visit was the first by a chancellor to Brussels in more than three years, despite the central importance of the City to both the UK’s economy and European financial services.
Around £11 trillion of assets were managed in the UK in 2020, just under half of which (44%) was on behalf of international investors, including those from the EU.
Chris Cummings, chief executive of the Investment Association, said: “The signing of the MoU on financial services is an important milestone.
“A close partnership between the UK and EU, which recognises the long-shared history of co-operation, is of mutual benefit and will mean a more resilient and dynamic investment management sector across Europe that benefits citizens and businesses wherever they may be located.
“Now the MoU has been confirmed, all focus must now turn to ensuring the Joint Forum on Regulatory Cooperation delivers a pragmatic, forward-looking dialogue focused on finding common solutions to common challenges.
“This includes encouraging greater retail participation in European markets, promoting international coherence in sustainability-related disclosures, and identifying how the utilisation of new technology can drive innovation across the sector.
“We look forward to working with HM Treasury and the European Commission in delivering against this goal.”