UK's Hammond says new UK-EU regulatory process needed after Brexit


LONDON, June 20 (Reuters) - A new system is needed for
allowing British and European Union banks to do business with
each other after Brexit to avoid splitting markets, Britain's
finance minister Philip Hammond said on Tuesday.
    Britain, the EU's biggest financial market is leaving the
bloc in 2019, raising the prospect of an abrupt cut in
cross-border links without a new trade deal.
    "Fragmentation of financial services would result in poorer
quality, higher priced products for everyone concerned," Hammond
told a financial audience in London.
    At present, banks and insurers in London serve the EU market
from a single base, but this "passporting" is set to end after
Brexit without new arrangements.
    "First, we will need a new process for establishing
regulatory requirements for cross-border business between the UK
and EU. It must be evidence-based, symmetrical, and
transparent.  And it must reflect international standards,"
Hammond said.
    "Second, cooperation arrangements must be reciprocal,
reliable, and prioritise financial stability. Crucially they
must enable timely and coordinated risk management on both
    "Third, these arrangements must be permanent and reliable
for the businesses regulated under these regimes," Hammond said.

 (Reporting by Huw Jones; Editing by Alison Williams)
 ((huw.jones@thomsonreuters.com; +44 207 542 3326; Reuters
Messaging: huw.jones.thomsonreuters.com@reuters.net))


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