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Growing EU-UK financial services rivalry driving divergence

October 2, 2020, Global Risk Regulator

John Ahern and Francis Maude are quoted in Global Risk Regulator regarding the European Union’s pursuit to compete with the UK in financial services.

Mr. Maude says, “One of the criticisms of the EU generally is that it tends to focus on competition within the EU. The UK focuses on competitiveness globally and the balance is not on lower levels of regulation. People who operate in sophisticated markets want a good level of regulation.” He believes that the UK’s reforms will be more about the style rather than deregulation.

Mr. Ahern says, “The idea of rolling back regulations is a really big shift in thinking post-global financial crisis, much of which was based on G20 reforms. A lighter-touch regulatory regime only goes so far, though. It is not a replacement for a well-ordered financial market and I’m not so convinced a lighter touch regime would be competitive with London.”

Mr. Maude says he is still confident a deal will happen because the UK and EU economies are fragile and a hard Brexit would damage both. He believes that key sticking points, such as the level playing field that the EU is demanding, can be resolved, partly because the UK does not have a tradition of dishing out large amounts of state aid to firms.

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