Xavier Rolet said any attempt to seize back euro trading would lead to unacceptable ‘systemic financial risk’
The EU risks triggering another financial meltdown if it punishes the City to make a ‘political point’ about Brexit, the chief executive of the London Stock Exchange warned today.
Xavier Rolet said any attempt to seize back euro trading would lead to unacceptable ‘systemic financial risk’.
He also appealed for quick clarity on a post-2019 transition deal, saying there was a risk jobs would start leaving the UK if businesses faced a ‘cliff edge’.
The comments follow an intervention by Bank of England governor Mark Carney yesterday, when he claimed the EU is at greater risk of financial instability after a ‘disorderly’ Brexit than Britain.
Tensions in the negotiations are rising ahead of a crucial summit, with EU leaders ramping up demands for a massive divorce bill .
The president of the European parliament, Antonio Tajani, has dismissed Theresa May’s offer to pay 20billion euros into budgets as ‘peanuts’ and accused Britain of being ‘unrealistic’.
But furious Brexiteers complained that the EU was ‘stalling’ negotiations in a bid to force Britain into handing over billions of pounds with ‘nothing in return’.
In an article for the Telegraph, Mr Rolet took aim at suggestions that Brussels could target London’s financial business. He said trying to cut the City out would mean the ‘global monitoring of risk would be impaired and that risk more heavily concentrated’.
He said: ‘To those who want to dismantle rather than build on a system of global regulatory standards that protects taxpayers and reduces the cost of capital, we say: do not willingly diminish systemically important global financial market infrastructure just to make a political point.’
Mr Rolet also cautioned that regulatory systems ‘cannot be replicated overnight’ so businesses will simply make their own arrangements and move to the EU if they are not given sufficient notice.
‘Businesses cannot risk a cliff-edge being so near before they start accelerating the migration of functions away from the UK to ensure they can participate in the global market,’ he said.
The warning from Mr Rolet came after Mr Carney said an ‘uncooperative’ Brexit would leave theEuropean Union ‘short’ of the financial services it needs because banks would still be headquartered in London.
Mr Carney told the Treasury select committee the overall economic impact of an angry breakdown in March 2019 would be worse for Britain.
The Governor said no deal was not in the interest of either side and told MPs there were a series of advantages to striking a good Brexit deal.
Brussels’ chief negotiator Michel Barnier has sought to up the pressure on the UK by repeatedly pointing out that the ‘clock is ticking’ before the formal Brexit date in March 2019.
Governor of the Bank of England Mark Carney (pictured in Parliament today) claimed today that the EU is at greater risk of financial instability after a no deal Brexit than Britain
Mrs May dined in Brussels with EU commission president Jean-Claude Juncker on Tuesday as she tried to find a way of unblocking the Brexit negotiations
Mrs May will head to the Belgian capital tomorrow for a summit where she will seek to push the case for trade talks to begin immediately.
But a major diplomatic offensive, which has seen the PM ring round almost all her counterparts over the past week and dine with European commission president Jean-Claude Juncker, has so far failed to secure a breakthrough.
Speaking on the BBC’s Newsnight, Mr Tajani took a hard line and quoted former PM Margaret Thatcher saying ‘we need our money back’.
‘We are realistic. The UK government is not realistic. I think we need to be very clear. We need to put the money on the table. We need our money back, as Mrs Thatcher said 30, 40 years ago,’ he said.
‘This is important for us. But we want not euro more and not euro less. This is very clear for us. But we need to pay, this is the third point, then it is possible to start for the negotiations for the new deal.’
Challenged that the EU was holding up talks to force money out of the UK, Mr Tajani replied: ‘€20bn is peanuts, it’s peanuts €20bn…The problem is 50, 60, this is the real situation.’
Mr Tajani lashed out at infighting on the British side, claiming that the EU was not clear ‘what the UK wants to do’.
The president of the European parliament, Antonio Tajani, accused Theresa May of being ‘unrealistic’ and said the divorce bill should be around 60billion euros
‘This is the problem. It is not very clear because there are a lot of problems inside the European Union. We are united. I don’t know if there is a unity, where is the unity in the United Kingdom? Because there are many different positions. We have only one position, only one negotiator,’ he said.
‘In the Conservative Party, there are different position. This is not good for a good work in the next month. We ask, please, we need a Conservative decision on this. Which is the line to take between the three different position. For us it’s important know.’
Ireland’s PM Leo Varadkar has also complained that the EU was still unsure what the UK hoped to achieve in a Brexit deal.
But former Cabinet minister Iain Duncan Smith said Brussels was using bullying tactics to pursue its ‘agenda’.
‘The EU has decided to drag its feet in the negotiations and refuse to discuss anything other than its own agenda,’ he wrote on the Brexit Central website.
‘That EU agenda is, of course, all about money — as much as they can get out of the UK in return for engaging on post-Brexit trade arrangements.
‘All that nonsense about ‘sufficient progress’ is of course a crude smokescreen to disguise a naked attempt to force us into a major financial commitment with nothing in return. That is why the talks have stalled.’