Reuters is reporting today that bankers in London are pressing for a Brexit plan based on mutual recognition:
London is expected to signal in the next few weeks that it wants a mutual recognition system to regulate financial services after Brexit, in the hope of preventing a hit to the City of London’s access to the bloc, they said.
“It is obviously in everyone’s interest to not just totally turn on its head the pan-European banking system,” one of the officials said. “Everyone has a lot to lose from this if we can’t get a deal.”
What is, perhaps, most curious about the report is that the efforts are designed to pressure not only the EU, but also Britain’s government. Although some officials like the Bank of England Governor Mark Carney have advocated for mutual recognition, UK officials have reportedly yet to provide concrete plans of how Britain’s government intended to protect the industry.
It’s improbable that the UK isn’t actively considering such a strategy. But even if they do, I think it’s far from clear that the EU would accept a mutual recognition agreement in the absence of serious concessions on other issues, including immigration.