https://ec.europa.eu/info/sites/info/fi ... _final.pdf
"...the Agreement does not cover any decisions
relating to equivalences for financial services.
(...).
These are and will remain unilateral
decisions of the EU and are not subject to negotiation"
(bold is as per original EU document)
The thing that stand out the most to me, and not only because it is highlighted in the document, is that the EU are making it absolutely clear that they will make any decisions related to equivalence for financial services entirely unilaterally, and without negotiation with the UK.
In other words, the UK will have no say at all in any such potential rules.
Which is quite staggering.
Clearly the EU don't feel that the UK has anything to offer in return which the UK could use as a bargaining chip.
And clearly nor are the EU concerned about reciprocity in this area.
I can't help feel that this is going to deal a substantial blow to London's dominance in the financial markets.
Sure it's true that much of London's trade is with the rest of the world, and not just the EU.
But clearly the EU is a large market in itself, and they would love it if they could build up their own strong financial centres. I believe France and Germany have already made it very clear they will welcome UK financial services moving into their operations into those respective countries.
So I can't see the EU now giving the UK banks and financial institutions any more access to the EU market than is strictly needed to cover short term needs while the EU ramps up financial services on their side.
Some have suggested that no problem, all UK banks need to do is setup subsidiaries in the EU.
True.
But with the EU market being bigger, isn't this going to result in the primary operations ultimately switching to the EU, with UK operations ending up the subsidiary?
Arguably, perhaps from a shareholder perspective, we (shareholders) will still be the beneficial owners whether the companies are operating from the UK or subsidiaries in the EU.
But if it's as simple as that, why the share price falls today for banks?