It is like arguing that eating sweets will rot your teeth. The head of the UK’s biggest financial industry lobby argued on Wednesday that the attempt by several European cities to take a slice of the City’s business will ultimately be bad for consumers and businesses.
A push by Amsterdam, Dublin, Luxembourg, Paris, and Frankfurt has been matched by the financial industry’s aversion to risk, exposure to regulatory uncertainty, and disruption of services.
But, the argument of the British industry is that hurting London would hurt European consumers and businesses.
Addressing the House of Lords Committee on Wednesday, Stephen Jones admitted that a number of EU member states are trying to “reclaim what they perceive to be 20 years loss of wholesale financial services to the London market,” Reuters reports.
Jones went on to argue that this was a shortsighted approach since market fragmentation would raise costs.
Jones is a former Santander and Barclays executive who resigned from the post of the senior adviser to US private equity group Cerberus, to work for the UK’s banking lobby group (UK Finance) in April 2017.
The body brings together six UK financial bodies, including the British Bankers’ Association, the Council of Mortgage Lenders, Payments UK, Asset Based Finance Association, UK Cards Association and Financial Fraud Action UK.
However, Jones also argued that British MPs should refrain from reprisals by massive deregulation in the financial industry as a significant divergence from EU rules would raise bigger access barriers for the financial sector to the Single Market.
In the context of a “hard Brexit” strategy, some MPs want to use the Great Repeal Bill as an opportunity to deregulate the UK’s financial market.
Jones on Wednesday insisted that any change in the UK’s financial regulation should come after Brexit negotiations have been concluded. Meanwhile, the UK is fully behind the idea of a two year transition period to minimize a wave of relocations and job losses for the City.