Jeremy Hunt, Chancellor of the Exchequer, has signed an agreement on financial services cooperation with Commissioner Mairead McGuinness, which will help to establish a constructive, mutually beneficial relationship between the UK and the EU in financial services.
This comes as the Chancellor is in Brussels for a series of meetings with European Commissioners, in the first visit from a UK Chancellor in over three years. Commissioner McGuinness is the European Commissioner for financial services, financial stability and capital markets union.
The Memorandum of Understanding signifies an important step in UK/EU relations post-Brexit. The UK is a leading global hub of financial services – of the £11 trillion of assets managed in the UK in 2020, around 44 per cent is on behalf of international investors including the EU.
The agreement will establish an ongoing forum for the UK and the EU to discuss voluntary regulatory cooperation on financial services issues. Both sides will share information, work together towards meeting joint challenges and coordinate positions where appropriate on issues ahead of G7, G20 and other international meetings.
The UK and the EU committed to the Memorandum of Understanding alongside the Trade and Cooperation Agreement. It adds to the growing number of regulatory cooperation arrangements the UK already has with major financial sector partners including the U.S., Japan and Singapore.
Responding to the news Laimonas Noreika, CEO, HeavyFinance said, “Enabling greater economic cooperation between with UK and the EU is critical for driving growth, tackling surging inflation and addressing the climate change emergency. In a challenging economic climate, businesses across these markets need access to crucial financial support and investment to hire fresh talent, reduce their emissions and develop a cleaner, leaner working model.
“This simply cannot be achieved without the financial systems in place to enable a regular flow of funding. This agreement is a step in the right direction to further expanding international collaboration in the financial services industry and will play a vital role in helping businesses transform for the better,” he added.
Fintech entrepreneur Khalid Talukder, co-founder of DKK Partners said: “The UK’s financial services industry is a major driver of growth and building stronger links with the EU is in our national and economic interest. This agreement is another major step forward in develop a blueprint for a truly prosperous post-Brexit Britain, that has strong links with the substantial EU marketplace, but also has the ability to trade internationally in other parts of the world.
“In the face of stubborn inflation and rising interest rates, giving businesses a trade boost should be a top priority for the government this year and beyond,” added Talukder.
Jeremy Hunt, Chancellor of the Exchequer, said: “The UK and EU’s financial markets are deeply interconnected and building a constructive, voluntary relationship is of mutual benefit to us both.
“In the UK, our financial services sector is a true British success story. Together with the related professional services sector it was worth £275bn last year, making up an estimated 12 per cent of the British economy.
“This agreement with our European partners as sovereign equals builds on our arrangements with the U.S., Japan and Singapore, helping to support the sector’s role as a global financial services hub.”
While the Chancellor is in Brussels he will also be meeting with Valdis Dombrovskis (European Commission Executive Vice-President responsible for an Economy that Works for People, also in charge of Trade) and Margrethe Vestager (European Commission Executive Vice-President for ‘A Europe Fit for the Digital Age and Competition). He will discuss the UK’s competitiveness and growth, the EU’s Green Deal Industrial Plan and economic security.