Brexit and how it affects capital markets (regulation)

Participants in the global financial market commonly paint Brexit as an almost apocalyptical scenario. The threat of a British exit from the EU arguably involves a significant disruption to financial integration in Europe, threatening the pre-eminence of London as a global financial centre, and imposing significant costs on all market participants. The contribution takes a different, more optimistic position on Brexit. It argues that its impact on financial services will be minuscule, if not irrelevant. Such optimism is grounded in the economic stakes for both the UK and the EU27 in retaining the benefits of access to the Single Market for financial services. Given their mutual economic interests, a likely outcome of the Brexit negotiations will be to keep Britain closely involved in the EU financial market or, alternatively, an agreement on the basis of regulatory equivalence. If no agreement is achieved, private solutions by market actors can be expected.