Brexit is never far from the top of the news agenda at present, and Financial Conduct Authority (FCA) chief executive Andrew Bailey chose to concentrate on the UK’s impending exit from the European Union when he gave his annual speech to the City Banquet in October 2018.
Mr Bailey began by semi-seriously highlighting how his organisation was prepared for all outcomes, including a ‘hard Brexit’ and a ‘no deal’ scenario, by commenting:
“We are preparing for a range of outcomes including an implementation period that smooths transition and a hard and sudden exit. It’s a lot of work, but I think we are on course, thanks in very large part to the huge input from FCA colleagues. I was amused the other day when someone asked in Parliament if the FCA had adequate resources to deal with this. It was the same day that we put out 900 pages of consultation documents on Brexit preparations for no deal, which is good going in a single day even by our standards.”
He called on fellow European regulators to engage with the FCA as a matter of urgency, saying the FCA needed to put in place Memorandums of Understanding and other important practical arrangements.
Next, he made reference to the Temporary Permissions Regime, that will allow European firms the chance to replace their existing passport with a temporary permission from the FCA that would allow them to continue to trade in the UK in the short term. These firms would then apply for full FCA authorisation in the longer term to keep their UK permissions.
Mr Bailey also called on banks not to relocate activities away from the UK unless it could be shown to be in clients’ best interests.
The FCA chief then called for the UK “to seek to stay closely aligned to the EU,” whilst recognising that the UK will be outside the EU financial regulatory system and will not be automatically bound by its rules.
In conclusion, he noted that his organisation had a role in advising the UK Government, but that it could not choose the country’s final relationship with the EU:
“The FCA can help to lay out the choices, and we will put our full weight behind making whatever is chosen work. That’s what we must do as a public body. This is the seventh City Banquet that I have had the pleasure of speaking at. At the outset, the challenge was rebuilding financial regulation after the crisis. Today, I am pleased to say the system is much more robust to shocks, but we have some other challenges on our hands.”
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