Financial Services Regulator Calls for Post-Brexit Transition Period

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According to his statement, the impact of Brexit on financial services has to be viewed in the context of an updated regulatory framework that is global in its design.

But Bailey said in order to preserve open markets and free trade for United Kingdom financial services firms there would need to be "strong co-ordination" of regulatory institutions between the United Kingdom and the EU.

The head of the UK's financial regulator added that "open markets, freedom of location and free trade in financial services matter a lot and should be preserved".

Michel Barnier, the EU's Chief Negotiator for Brexit warned today that you are either in the Single Market or you are not, there can be no special deals for different parts of the economy; while Andrew Bailey, the head of the FCA, the United Kingdom finance industry's regulator, says firms won't have to move to the European Union after Brexit nor do you have to be in the single market to get the benefits of free trade with the EU. "I hope you will not be surprised to hear that my answer to these is "No". "The economic and financial cost of losing open markets is too great to be justified and is not a necessary response to the choice of Brexit".

"Does it require membership of the Single Market to get the benefits of free trade with the EU? No".

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The commitment of G20 leaders, in Pittsburgh in 2009, to avoid fragmentation of markets, protectionism and regulatory arbitrage, has not changed and Brexit should not be seen as a reason for straying from that goal, said Bailey. He added that there would be no retreat from worldwide engagement or cooperation with other regulators.

His comments come despite his own admission, earlier this week, that the FCA is being excluded from certain discussions at the European Securities and Markets Authority due to Brexit.

Bailey notes the United Kingdom would have to "provide comfort to our trading partners" that Brexit does not represent a race to the bottom on deregulation.

It comes after Mr Bailey told the Financial Times last week that the FCA has already been locked out of some Brexit talks by its European equivalents. It includes a system of common financial rules that all countries in the passport network sign up to. My counterparts in other countries have the same objectives.

Instead Bailey argued it is in everyone's interests to seek "strong co-ordination" with Europe on regulation and supervision, with comparable but not mirrored rules, exchange of information between regulators, and a mechanism of some kind to handle differences between regulatory regimes.

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