It could take decades for Britain to determine the shape of financial services industry regulation after Brexit, Nicky Morgan, who chairs parliament’s Treasury Select Committee, said on Wednesday, Reuters reports.
Britain and the EU aim to secure a “standstill” or business as usual transition deal starting after Brexit next March, but the country will need new trading terms with the bloc from the end of 2020.
EU officials have said that the EU’s financial market access system known as equivalence, where Brussels grants access to foreign banks and insurers if their home rules converge with the bloc’s, is probably Britain’s best bet.
Morgan told an industry conference on Wednesday the Treasury committee would look at equivalence and post-Brexit financial services in early 2019.
“The story of the next 40 years of this country, or it could be longer, in relation to that future relationship with the EU, is going to be whether we converge, stay the same or whether we choose to diverge and go our own way,” Morgan told the Personal Investment Management & Financial Advice Association annual conference.
Equivalence is patchy compared with current EU market access for Britain’s biggest export sector because it excludes some major financial activities such as commercial lending.