€1.3tn of financial services contracts at risk from Brexit

MEP Brian Hayes warns of major fallout across financial sector from no-deal scenario

Fine Gael MEP Brian Hayes: “These are agreed long-term contracts whose lifespan lasts well beyond Brexit.” Photograph: Alan Betson

Fine Gael MEP Brian Hayes: “These are agreed long-term contracts whose lifespan lasts well beyond Brexit.” Photograph: Alan Betson

 

Up to €1.3 trillion worth of financial services contracts are at risk from the UK crashing out of the EU without a deal, Fine Gael MEP Brian Hayes has warned.

Mr Hayes said the EU’s regulatory framework enables financial services to be “passported” between the UK and all EU countries, but this framework will cease to apply after March 2019 when the UK leaves the EU.

“And if no arrangements are put in place to manage the fallout from the change in the regulatory relationship between the UK and the EU, then over €1.3 trillion worth of financial services contracts are at risk,” he said.

“These are agreed long-term contracts whose lifespan lasts well beyond Brexit. They relate mainly to insurance and derivatives and are of huge importance for the financing of the EU economy,” Mr Hayes said.

“If we have a no-deal scenario, effectively a cliff edge, many of these financial services contracts will be null and void and there is complete uncertainty about the value of the outstanding assets and how they would be redeemed.”

The UK government wants a trade pact with the EU in financial services but EU negotiators are dismissive of the trade models being put forward by London, noting it is not possible to be half in and half out of the single market.