Lord (Mervyn) King, former Governor of the Bank of England, this week set out his belief that the City of London would better off seeking regulatory equivalence with New York than adopting an EU model. In a carefully argued article, published by Bloomberg, Lord King highlights the contradictions at the heart of the EU’s demands for a ‘level playing field’. Imposing rules and regulations on a trading partner is a strange basis for a free trade deal, and the UK would be better off trading under WTO terms than accepting such a prescriptive system of regulatory alignment.
The article notes that since the financial crisis of 2008, EU financial policy has become ever more reliant on detailed directives written in Brussels. The US and UK, on the other hand, share an instinct to avoid excessive demands for compliance. Regulatory alignment with the EU means we lose the benefits of EU membership without enjoying the benefits of Brexit. Alignment with the US allows the City of London to seize these benefits, competing with its real rival, New York, rather than the various European hubs.
You can read the full article here.