LONDON Regulators throughout Europe will have to be versatile and discover “unusual answers” for dealing with banks seeking to transfer operations from London to the continent after Britain leaves the European Union, a high German regulator mentioned on Wednesday.
Banks in Britain are already starting to implement plans to make sure they’ll proceed serving their continental European shoppers after Brexit, anticipated in simply over two years’ time.
With no clear blueprint for Britain’s new buying and selling relationship with an EU of 27 member states, regulators fear that disruption to cross-border buyer hyperlinks might undermine monetary stability.
Felix Hufeld, the pinnacle of German monetary watchdog Bafin, signaled on Wednesday in a speech in London that he and his counterparts throughout Europe might have to be versatile over Brexit.
Hufeld mentioned it will be some time earlier than it’s potential to see the seemingly end result of two years of Brexit negotiations.
“Plenty of water is still likely to flow under London’s bridges before we know precisely how soft or hard the Brexit will ultimately turn out to be,” he mentioned. “In such an environment, regulation will also need to find unusual answers.”
British Prime Minister Theresa May, who plans to launch divorce proceedings by the top of March, has mentioned Britain intends to stop the EU’s single market, which might isolate the City of London from many European shoppers.
Regulators must present “pragmatism and flexibility on many individual issues,” Hufeld mentioned in a ready textual content of his speech.
He in contrast regulators’ position to taking part in good jazz music that entails improvising, whereas on the similar time maintaining management.
“With improvisation, it is like with good jazz; it really only works if you can play the instrument and the notes perfectly,” he mentioned.
Bank of England Governor Mark Carney warned final month that the remainder of Europe has extra to lose than Britain from an abrupt Brexit due to the significance of Britain’s monetary providers trade for the area.
Regulators in European international locations competing for post-Brexit banking enterprise are providing London-based banks a variety of short-term workarounds to assist them relocate, bankers, regulators and legal professionals say.
Many banks want to Frankfurt as a brand new EU base – a course of that might usually take a number of years to finish, going properly past the anticipated 2019 Brexit deadline.
Germany’s high regulators met about 50 envoys from overseas banks on Monday to elucidate how they may transfer enterprise to Frankfurt.
(Reporting by Andrew MacAskill and Helen Reid; Editing by Adrian Croft)