Professor Rosa Lastra spoke on the future of financial services in the EU and the United Kingdom following Brexit. If no transitional period is agreed, the current status quo of unrestricted, reliable, and generic single passport in the provision of financial services in the United Kingdom will be replaced by a new untested system whose efficacy is yet to be proven, in particular in the scenario of a ‘no deal.’ UK firms face the loss of the right to passport from the UK into the EU/EEA and EU/EEA firms face the loss of the right to passport into the UK. Whatever system of equivalence, mutual recognition, or bespoke arrangement gets adopted in the end, it will lead to different paths for the future of financial services provision in the UK (fund management, insurance, banking) creating inconsistencies, legal certainty (for example with regard to the clearing of derivatives contract), and risks to financial stability. The presentation also covered the future of the banking union and capital markets union in Europe.
