April 24, 2018 / 8:39 AM / a month ago

EU says "equivalence" a pragmatic solution for UK banks after Brexit

LONDON, April 24 (Reuters) - The European Union’s existing system of market access for foreign financial firms is not perfect but can work for Britain after it leaves the bloc next year, the EU’s financial services chief said on Tuesday.

The so-called equivalence system is based on Brussels granting access to the EU for banks, insurers and asset managers from outside the bloc if the bloc deems their home rules to be similar enough.

Britain has said equivalence is too one-sided and wants a bespoke trading deal for banks based on mutual recognition or the UK and EU accepting each other’s rules.

Valdis Dombrovskis, European Commission Vice President and responsible for financial services, said it was a pragmatic solution for Britain after Brexit.

“To sum up: equivalence is not perfect, neither for firms nor for supervisors,” Dombrovskis told CityWeek conference in London.

“But we should not let perfect be the enemy of good. Equivalence has proven to be a pragmatic solution that works in many different circumstances, and it can work for the UK after Brexit as well.”

Reporting by Huw Jones, editing by Marc Jones

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