To become a « big Switzerland » (see episode 2 : « the british secret plan »), the UK must keep its EU bank passport. Brexit episode 3 : hard Brexit or the great bluff from Theresa May to keep the EU bank passport …
Brexit : episode 3
The great bluff
To become a « big Switzerland » (see episode 2 : « the british secret plan »), the UK must keep its EU bank passport
What is the EU bank passport ?
The bank passport comes from the MIFID (Markets in Financial Instruments Directive) in 2004 to provide harmonised regulation for financial services accross the 31 member states of the EU (28 + Iceland, Norway and Liechtenstein) as the USA did in 1975.
Banks and financial companies can be authorised by their supervisory authority to do business in one member state of the EU without having to be separatly authorised in each country.
The financial sector establishes in London, as the continent’s dominant financial center, to sell financial services accross the EU
The english genius
2 billion inhabitants
500 million inhabitants
As the UK opened up a huge market (2 billion people) through the Commonwealth, the UK can deal with 500 million of europeans through the EU bank passport.
(The Commonwealth is a group of countries – ex British Empire – since 1947)
How can the UK keep the bank passport while the EU doesn’t want to ?
The UK knows Paris or Francfurt can’t be dominant financial places because both don’t satisfy all necessary requirements.
Requirements to be a world financial center
- an international language
- business environment
- to attract best talents (way of life, education, tax policy)
- regulatory organisation
- IT expertise
Global Financial Center Index (06/2016) :
- London : first city on the global ranking (New York : 2nd)
- Francfurt : 19th
- Paris : 29th (between Caiman Islands and Casablanca)
Hard Brexit : just a bluff from Theresa May
She starts with a tough negociation while she is prepared to make concessions in order to keep the bank passport.
The ultimate and main argument will be if London looses the bank passport, the whole EU looses because the dominant financial center will move to New York or Singapore.
My kingdom for a passport
Theresa May is a tough cookie. Don’t forget the English talent to negotiate. For instance, the UK set up the English frontier in Calais on the French territory ( Sangatte Protocol – Eurotunnel negotiation in 1991 ) !