The financial services industry is one of the most heavily regulated sectors of the modern economy reflecting the need to protect the public interest in a strong and stable financial system. The UK’s regulation of the financial services sector – UK financial governance – is heavily based on EU financial governance and, in particular, on the EU’s ‘single rulebook’ for financial services. The nature of the UK’s relationship with the EU following its exit from the EU has yet to be determined. But the consequences of the extraction of the UK from EU financial governance are likely to be disruptive in nature and long term in duration.
In a comment published on July 1 in the German Law Journal I consider some of the many implications from a regulatory perspective and with respect to the main domains of financial governance which shape UK financial governance: the international market, the EU single market, the euro area, and the domestic UK market. The comment outlines why the UK’s influence on the international standard-setting process is likely to diminish, the regulatory consequences of exit from the single market in financial services, the likely change to current euro area/single market dynamics and the implications for UK euro-denominated business, and the consequences for domestic UK financial governance. The piece is available here.
Niamh Moloney is Professor of Financial Markets Law at the London School of Economics and Political Science, Law Department.