McGuinness says EU-UK financial co-operation hinges on Britain keeping its word

EU financial services chief Mairead McGuinness has said UK access to the EU's financial market hinges on trust.

The EU is not intent on stealing business from the City of London, but future access for Britain to the bloc's financial market will hinge on whether it can be trusted to keep its word, EU financial services chief Mairead McGuinness has said.

Trading arrangements for the North of Ireland since Britain left the EU have created tensions, with Britain unilaterally delaying the implementation of some provisions in the Northern Ireland Protocol.

Ms McGuinness said the EU was waiting to see which path Britain chose: sticking to obligations agreed when it left the EU, or continuing to act on a unilateral basis.

"We hope that the UK will choose the first, more appropriate and sustainable path. That will help us co-operate across sectors, including in financial services," she said.

"When you sign up to international agreements and make commitments, partners need to be able to count on your word and your signature."

Britain's full departure from the EU's orbit last December largely severed the City from the bloc, leading to a shift in billions of euros in daily stock and swaps trading from London to the EU.

The bloc is now seeking ways to shift clearing of euro derivatives from London to Frankfurt.

Amsterdam is also proving an early winner. Data in February showed the Dutch city had displaced London as Europe’s biggest share trading centre in January, and had overtaken London to become Europe’s top corporate listing venue so far this year.

Ms McGuinness said the EU's goal was not to "steal" business from London but to build up its own financial market infrastructure.

Britain and the EU have agreed a memorandum of understanding for a new forum for co-operation in financial regulation but it has yet to go live. It is an important step for any prospect of City of London access to the EU under the bloc's 'equivalence' rules.

Meanwhile, the UK has formally started negotiations to join an 11-nation trans-Pacific trading bloc, part of its bid to diversify its commerce post-Brexit.

Joining the CPTPP - whose members include Canada, Japan, Mexico and Australia - is a “glittering post-Brexit” prize, Britain’s international trade secretary Liz Truss said.

Membership would boost the size of the UK economy by £1.8bn (€2bn) over 15 years compared with its 2019 level, according to her department. That would mean an increase of 0.08%.

“This part of the world is where Britain’s greatest opportunities lie,” Ms Truss said. “Membership would help our farmers, makers and innovators sell to some of the biggest economies of the present and future.”

- Reuters and Bloomberg