Clifford Chance

UK exit from the EU: an orderly transition for banking

30 August 2016

The British electorate has voted to leave the European Union (‘EU’), and their wishes must be respected. The UK and the EU27 must now work together to agree a new, successful,  partnership that works for UK and EU customers, businesses and the economy. The shape of this new relationship will have enormous influence upon the future for the UK and the EU27.

The emergence of the new relationship is likely to involve a period of uncertainty as its shape is agreed. It will be in the interests of all concerned to minimise this and work to avoid instability and disruption to businesses and customers on both sides of the Channel that benefit from the flow of trade and services across the UK and Europe. In relation to financial services, the EU’s single market has enabled the free flow of the funding, risk management and other services that support businesses and customers and deliver substantial benefits for them.

Failing to preserve the mutual market access enabled by the single market either during the shaping of the new relationship or subsequently would have significant adverse consequences for the provision of the financial services that are so valuable for many businesses and customers in the UK and EU27. Consequently, there will be sound reasons to avoid this as an outcome and to agree a successful new arrangement that enables mutual market access to and from the EU single market to be preserved. There are means available to those responsible for negotiating the new partnership to accomplish this.

By preserving broad reciprocal cross-border market access rights, providing regulatory certainty and operational flexibility we can ensure businesses and households continue to benefit from an integrated European financial services sector. An ambitious, innovative and cooperative agreement between the UK and EU27 would achieve these aims.

To inform this debate, UK Finance has worked with Clifford Chance and Global Counsel to identify the impacts of the UK’s withdrawing from the EU upon the products and services provided by the bankingindustry that are of greatest value for businesses and customers in the UK and EU27. The report considers the options to minimise the potential disruption for customers and businesses in the UK and EU27 that might otherwise occur should there be a disorderly exit and the tools available to deliver the most positive outcome for the UK’s and EU27’s citizens.

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