The UK and the European Union signed a long-awaited memorandum of understanding on financial services on Tuesday, marking a moment of accord amid years of wrangling over post-Brexit co-operation.
(Bloomberg) — The UK and the European Union signed a long-awaited memorandum of understanding on financial services on Tuesday, marking a moment of accord amid years of wrangling over post-Brexit co-operation.
Jeremy Hunt approved the memo with Commissioner Mairead McGuinness during the first visit to Brussels by a UK chancellor in more than three years. Hunt described the move as an “important turning point,” saying “we have shared objectives and cooperation is essential.”
“The UK and EU’s financial markets are deeply interconnected and building a constructive, voluntary relationship is of mutual benefit to us both,” Hunt said. The UK’s financial services and related professional services sectors were worth £275 billion ($350 billion) in 2022, making up about 12% of the UK economy, according to the Treasury.
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The memo, which was initially expected in 2021, became stuck in limbo, first because of a dispute over fishing permits and later when the EU accused then-Prime Minister Boris Johnson of breaching international law.
The agreement outlines how financial regulators will interact on a regular basis, with the first meeting set for autumn. It does not grant companies access to markets across borders, known as equivalence. The EU has so far only granted limited equivalence to clearinghouses and has been pushing banks and other firms to conduct more business within the bloc to reduce its dependence on London.
(Updates to confirm signing, add Hunt comments and details on memo throughout.)
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