Finance chief speaks on dangers of fragmenting London’s financial sector

Insurers could face the consequences of a “short-sighted approach”

Finance chief speaks on dangers of fragmenting London’s financial sector

Insurance News

By Terry Gangcuangco

The scramble for a new EU base post-Brexit has long been underway for financial firms, but now alarm bells are being set off as several countries lure moving insurers. UK Finance has warned against increased costs for both consumers and companies.

“We detect some degree of political will in certain parts of continental Europe in order to reclaim what they perceive to be 20 years loss of wholesale financial services to the London market,” said UK Finance chief executive Stephen Jones while addressing a House of Lords committee, as quoted by Reuters.

The banking industry body believes there would be significant increases in costs not only for individuals but for firms as well amid fragmenting markets. “It’s a very short sighted approach to negotiations, but I recognise that in certain markets it’s the political reality,” added Jones.

Meanwhile Christopher Giancarlo, chairman of US regulator Commodity Futures Trading Commission told The Telegraph: “Any forced relocation... has the potential to impose significant costs on the global economy, not just Europe, and fragment financial markets to the detriment of systemic resiliency worldwide.”

Earlier finance minister Philip Hammond assured that both the UK and the EU are avoiding outcomes that impose unnecessary costs.

“What the final EU-UK relationship looks like will be a matter of negotiation, but we are ambitious in our aim to secure a bespoke and reciprocal arrangement that preserves the greatest possible market openness,” he wrote in a letter to Treasury Select Committee chair Nicky Morgan.

Related stories:
Regulator delivers warning to insurers: prepare for a “very hard” Brexit
Everest Re sets up new home post-Brexit

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