In a move that is likely to enrage eurosceptics who want to break away from the bloc's legal system as soon as possible, large banks in Britain want the UK government to allow their industry to remain subject to EU laws for up to five years after Brexit.
News agency Reuters reported that during the aforesaid period, the banks wants the European Court of Justice to rule on decisions related to their businesses and are are also pressing the government to allow for the same.
Law firms on behalf of banks lobbying the government for a departure in stages from the EU have prepared the document. Bankers said that it is the most detailed request yet by Britain's financial industry for a transitional period to give it longer to adapt to Brexit, has been shared with the Treasury and has the support of major banks.
Treasury declined to comment on the document.
"The report has been received as a fairly serious piece of work. It focuses on the legal underpinning of a transitional arrangement," according to one banker at a large international firm, reported Reuters. "It's a heavyweight legal piece of work."
Reflecting diverging views about the best way to leave the EU and concerns about a backlash from those who campaigned and voted for Brexit the British government is currently divided on whether to support demands for transitional arrangements - and if so, in what form. The Brexit minister David Davis and Prime Minister Theresa May are yet to commit publicly to supporting any deal while some Treasury officials are backing the move.
The views of the financial sector are being closely looked into by the finance minister Philip Hammond, the treasury said in a statement.
If banks do not secure a transition phase beyond the two-year withdrawal period that will begin when the government invokes Article 50 of the EU's Lisbon Treaty, the document warns of the potential shock to the British and European economy from a loss of critical financial services. It further says that some banks may not be able to set up new British subsidiaries in time or be able to move parts of their operations out of Britain of no transition deal is agreed. This can result in the banks abruptly halting their EU business activities.
The process of relocation could be slowed down by the regulators because to the large number of firms seeking to do this simultaneously even as it would normally take banks as long as three years to relocate operations, according to the document.
"Transitional arrangements are likely essential," the document says. "This is important in order to avoid potential damage to the "real economy" that is reliant upon uninterrupted access to financial services. The demands for special treatment for an industry scorned by Britons since the financial crisis may put it on a collision course with swaths of the public and politicians who voted for Brexit because they wanted Britain to regain control of its law.”
for a period of delay following the two-year exit process for it to have any impact, the document argues that Britain must secure an agreement with Brussels – around the time of triggering Article 50.
"We well understand the political sensitivity to that proposition," the document says.
(Source:www.reuters.com)
News agency Reuters reported that during the aforesaid period, the banks wants the European Court of Justice to rule on decisions related to their businesses and are are also pressing the government to allow for the same.
Law firms on behalf of banks lobbying the government for a departure in stages from the EU have prepared the document. Bankers said that it is the most detailed request yet by Britain's financial industry for a transitional period to give it longer to adapt to Brexit, has been shared with the Treasury and has the support of major banks.
Treasury declined to comment on the document.
"The report has been received as a fairly serious piece of work. It focuses on the legal underpinning of a transitional arrangement," according to one banker at a large international firm, reported Reuters. "It's a heavyweight legal piece of work."
Reflecting diverging views about the best way to leave the EU and concerns about a backlash from those who campaigned and voted for Brexit the British government is currently divided on whether to support demands for transitional arrangements - and if so, in what form. The Brexit minister David Davis and Prime Minister Theresa May are yet to commit publicly to supporting any deal while some Treasury officials are backing the move.
The views of the financial sector are being closely looked into by the finance minister Philip Hammond, the treasury said in a statement.
If banks do not secure a transition phase beyond the two-year withdrawal period that will begin when the government invokes Article 50 of the EU's Lisbon Treaty, the document warns of the potential shock to the British and European economy from a loss of critical financial services. It further says that some banks may not be able to set up new British subsidiaries in time or be able to move parts of their operations out of Britain of no transition deal is agreed. This can result in the banks abruptly halting their EU business activities.
The process of relocation could be slowed down by the regulators because to the large number of firms seeking to do this simultaneously even as it would normally take banks as long as three years to relocate operations, according to the document.
"Transitional arrangements are likely essential," the document says. "This is important in order to avoid potential damage to the "real economy" that is reliant upon uninterrupted access to financial services. The demands for special treatment for an industry scorned by Britons since the financial crisis may put it on a collision course with swaths of the public and politicians who voted for Brexit because they wanted Britain to regain control of its law.”
for a period of delay following the two-year exit process for it to have any impact, the document argues that Britain must secure an agreement with Brussels – around the time of triggering Article 50.
"We well understand the political sensitivity to that proposition," the document says.
(Source:www.reuters.com)
