FCA's Bailey on EU regulators getting Brexit wrong

FCA's Bailey on EU regulators getting Brexit wrong

The chief executive of the Financial Conduct Authority has said he is more worried about the readiness of European banks for a hard Brexit than he is for UK ones.

Speaking at The Times CEO summit, Andrew Bailey said the assessment of the European Banking Association that UK banks have not been preparing for a hard Brexit was wrong.

He also said European regulators were wrong not to offer UK banks greater assurances about the level of access those businesses would have to the European Union in the event of a no-deal Brexit.

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Mr Bailey said: "The idea that we leave firms to deal with transitional risk is wrong.

"The idea that institutions in London have done no preparation, no thinking about Brexit, I’m afraid, and with all due respect to the EBA, is considerably wide of the mark."

His comments echo those of Christopher Woolard, the FCA's executive director for strategy and competition, who told the Investment Association's recent conference the EU's approach to negotiations on Brexit was "not helpful".

The EBA said UK firms were not adequately prepared for Brexit, and they were "delaying triggering the necessary actions" on Brexit contingency plans.

Laith Khalaf, senior analyst at Hargreaves Lansdown, said: "In total investors have put £61bn into investment funds since the EU referendum was announced in February 2016, though over this period £7.9bn has been withdrawn from UK equity funds.

"Commercial property funds have also witnessed a £1.9bn net outflow, and many funds in this sector had to limit trading in the summer following the EU referendum in order to meet sales orders.

"The Strategic Bond sector meanwhile has enjoyed strong inflows over the period, registering net inflows of £9.5bn since February 2016."

He said that despite the outflows, the UK market has actually generated a reasonable return for investors since the Brexit vote, partly due to the weakness of sterling, and partly as a result of a stronger performance from the global economy.  

Alan Steel, who runs Alan Steel Asset Management in Linlithgow, said Brexit is something to be "positive about".