Banks in U.K. Eyeing EU Market May Find Equivalence Cold Comfort
- City of London is keen to maintain full single-market access
- EU Commission issues, and can withdraw, equivalence decisions
For bankers in the U.K., a lot of money and a lot of jobs hang on the terms of their continued access to the European Union’s single market after Brexit. Yet those terms -- such as “passporting” and “equivalence” -- aren’t exactly household names.
Of the two, “passporting” might get the City of London closer to its goal of maintaining full access to the single market. It refers to the right of companies authorized in one country of the European Economic Area -- currently comprising the EU plus Iceland, Liechtenstein and Norway -- to carry out a range of permitted business activities throughout the bloc. It’s a major attraction for the big foreign banks, such as JPMorgan Chase & Co. and Citigroup Inc., that base their European operations in London.