Andrew Bailey, chief executive of the Financial Conduct Authority (FCA), today urged political leaders to strike a deal for the financial services industry by the end of next month.
The chief of the UK’s regulatory body said: “First, it is not sensible to imagine material regulatory divergence, especially in wholesale financial markets. It is a false concept. Markets are global and we cannot in practice diverge much in terms of regulatory outcomes, and regulatory arbitrage is not an allowable ground for competition.”
Bailey went on to say: “We need by the end of March a joint commitment by the political authorities to a well-defined Implementation or transition period which will create the space and support for the regulators to work with firms and political authorities to put practical solutions into place.
“The benefits of a transitional period go beyond the need for time to deal effectively with these operational issues, but the latter are nonetheless important,” he said, before adding, “We think this is an important safeguard and a sensible way to underpin financial stability. I am grateful to the government for committing to introduce the secondary legislation needed to put such an arrangement in place.”
Bailey’s comments come as talks between London and Brussels enter a crucial – and potentially fraught – second round, with the British prime minister coming under increasing pressure to clarify the future of Britain’s relationship with Europe.