CFTC Chair J. Christopher Giancarlo called for the United Kingdom and European Union to reach a mutually beneficial financial services arrangement before Brexit.
In remarks on the future of the City of London as a global, European financial center, Mr. Giancarlo stated that the United Kingdom and European Union need each other in order to remain major players in the global financial market. Mr. Giancarlo said that the European Union needs free access to the city in order to play a role in the global financial markets. He said that restricting EU trading to the Eurozone will limit its access to global pools of capital and may reduce the European Union to a regional economy. Without Euro-denominated instruments transacted in London's premier trading markets alongside the U.S. Dollar, the Euro may remain a predominantly regional currency with limited global influence, he said.
As for the United Kingdom, Mr. Giancarlo emphasized that it must remain a part of the European economy and avoid becoming a largely "offshore" European financial operation. Mr. Giancarlo said that the City of London needs to continue:
- hosting the trading and servicing of Euro-denominated instruments;
- holding some "passporting rights" to provide services in the European Union;
- underwriting securities offerings by EU firms and sovereign entities;
- having access to a "large pool of human talent"; and
- providing financial services, which generate over seven percent of the UK GDP.
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