Implications of Brexit on EU Financial Services

This study, which is prepared by Policy Department A at the request of the ECON, addresses the implications and economic impact of several scenarios the UK leaving the EU in relation to financial services, ranging from a ‘hard Brexit’ any arrangements concerning financial services to the current state of affairs the terms of a full EU membership. Special focus is put on a peculiar of ‘hard Brexit’, which are the third-country regimes in the current EU legal framework that allow partial access to the EU single market based ‘equivalence’ on the basis of decisions by the European Commission or national. The study presents these regimes and the extent to which they were used in the past. The economic analysis looks at three variations of ‘hard ’ (one, in which the access to the single market is closed, one with partial based on equivalence and one, in which the City of London is transformed an ‘offshore financial centre’) and at the scenario, in which the UK joins the. The economic assessment is based on the current state of affairs in relation the interwovenness of financial services in the EU28 including a closer look at importance of UK-based clearing of Euro denominated trades.