Brexit and UK-Based Financial Services

Abstract

This article seeks to present the key issues which Brexit is raising for financial services based in the UK, as they appeared in early 2017: i.e. since the Government has made clear that Britain will leave both the EU and the Single Market. The article reviews the place of UK-based financial services internationally and with respect to the European Union. The article then looks at some of the main questions currently highlighted by the Brexit process, most notably the loss of “passporting rights” for UK-based banks, and the possibility of “equivalence” status which may allow some firms to continue operating throughout the European Union. The article finishes by looking at the dangers involved in so-called “train-crash Brexit” or economic relations with the EU falling off a “cliff edge”, if no proper transition process is negotiated by spring 2019. It notes that this could entail considerable risks for the UK and the EU itself, especially as the international environment has become far more uncertain with the election of President Donald Trump.

Keywords

• United Kingdom
• European Union
• Brexit
• financial services
• passporting rights