Originally posted by BlasterBates
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Read this article about a Moody's research piece.
"Banks don't need passporting rights"
"Leaving the EU Single Market and losing passporting rights would be far from a disaster for the City of London, leading analysts at Moody's have found."
"On the face of it, [losing passporting rights] could be significant for many London-based firms, forcing them at a minimum to apply for authorisation to do business in other states, or at worst having to move staff and operational processes to a location within the European Economic Area (EEA)," Moody's stated."
"However, the ratings agency added: "In practice, we expect the impact of a formal withdrawal of the UK from the EEA to be limited for most UK banks."
Researchers cited EU equivalence rules - which apply to countries with broadly similar regulatory regimes - as allowing countries outside the EU to be treated on preferential terms. Moody's listed a lengthy catalogue of financial activities which could be protected for "global investment banks" under the scheme if they chose to stay in London, including foreign currency trading, trade execution, underwriting, portfolio management, and sales of derivatives.
"These provisions should also ensure that EU banks can operate in international capital and money markets which are largely based in London."
Any "costs" of a loss of passporting rights for the UK's banks would largely be as a result of any internal restructuring, temporary hits to profitability and a diversion of management resources while financial services firms figure out the new rules of the UK's relationship, Moody's said. "Other critical factors, such as capital and liquidity which are largely determined by global standards, are unlikely to face material change due to Brexit".
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