EU Unlikely to Give U.K. Wide Equivalence, Irish Ambassador Says

(Bloomberg) -- The European Union is unlikely to grant wide-ranging access to the British financial services industry, Ireland’s ambassador to the bloc warned.

“I wouldn’t be entirely over-optimistic that there will be a strong equivalence regime in the future, or that this promised memorandum of understanding will lead to very strong and positive developments in the relationship between the two sides on financial services,” Thomas Hanney told a webinar on Friday hosted by Dublin City University.

“Many member states are uncomfortable with the idea that the EU should be reliant on a huge capital market over which it’s going to have relatively little regulatory influence,” Hanney said. “I think there is an appetite to try and repatriate quite a significant chunk of the financial services industry into the European Union.”

Read more on how equivalence shapes post-Brexit banking

So far the EU has been reluctant to enable London-based finance firms to operate in the bloc, following a Brexit trade deal that largely sidelined the industry. The two sides are drafting a memo on how they will co-operate on regulation, although the terms are mostly technical.

The lack of an agreement has put London’s decades-long dominance of European finance under threat. Hanney’s comments were echoed by former U.K. ambassador to the EU, Ivan Rogers, who told the webinar he is “quite pessimistic about where this ends up on equivalence.”

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