BoE to allow European banks to continue operations as usual post Brexit: BBC
20 December 2017
The Bank of England will allow European banks to continue operating in the UK without having to create expensive subsidiaries after UK exits the EU, the BBC reported today.
Confirmation of the decision would mean European banks offering wholesale services would not face new post-Brexit hurdles to operate in London, which competes with New York for the title of the world's financial capital.
The central bank will publish its approach to future supervision of foreign banks, insurers and clearing houses at 1300 GMT.
Financial services is the UK's single biggest tax-earning sector, net government coffers £70 billion annually. In the event of foreign banks moving out, the financial industry would start collapsing according to industry officials.
The EU has proposed that, as a last resort, clearing of euro denominated derivatives should move from London to the euro zone after Brexit.
By allowing EU banks' branches in London to be supervised by their home regulator, UK will be hoping the bloc would in return allow euro clearing to continue in the UK.
According to commentators, the UK gesture could also see softening of EC plans, due to be published today. The plans aim to tighten the conditions for allowing investment banks from outside the EU to operate inside the bloc.
Meanwhile, The Guardian reported that it understood that environment secretary, Michael Gove had warned senior colleagues to avoid a re-run of ''project fear'' during a crucial cabinet meeting over what Brexit end state the government should be aiming for.
According to those present the environment secretary, Gove who was one of the leading figures behind the "Vote Leave" campaign, called for avoiding a repeat of the divisive arguments of the EU referendum.
Details of the cabinet discussions emerged, as Theresa May told her cabinet that she intended to strike a trade deal that is ''significantly more ambitious'' than the EU's deal with Canada. It was the first formal discussion held by ministers about goals for final outcome.