UK to leave Single Market
Authored by: Adam Borowski, Analyst Consultant - Synechron Business Consulting
Volatility has been the only recognisable trend in Financial Markets since the shock Brexit outcome of the EU referendum. And whilst the UK Government has implemented policies designed to stabilise markets, it has at the same time risked political uncertainty by calling a snap election and dashed any hopes that a Brexit deal would maintain the UK’s membership to the Single Market. Or has it?
The UK’s Financial Services sector is envied across the world. It’s long-established financial infrastructure and legislative framework has provided the foundation for Banks and Corporates to thrive. Globalisation has strengthened London’s position as a global financial hub through its unique competitive advantage of being located in a time zone convenient for business with both the US and Asian markets. This position was bolstered with the creation of the European Single Market and Passporting Regime, which shaped London as the golden gateway into Europe for Financial Services – it was simply the cherry on top.
The fundamental principle of the Passporting Regime is to minimise the regulatory, operational and legal burden on firms offering cross-border services within the Single Market. It creates the freedom for firms established in member states to provide and receive services. What makes it so lucrative is its openness, particularly to international firms – its why many American Banks choose London as a gateway for business in Europe. So why would the UK Government appear to disregard these benefits and leave the Single Market?