Recent trends in UK financial sector regulation and possible implications for the EU, including its approach to equivalence

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The SME finance gap in the European Union

Abstract This paper presents SME financing gaps across European countries over the period 2013 to 2020, using two different methodologies, one reliant on firm balance sheets and one on firm-level surveys. We show significant...

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Abstract

Brexit poses unique challenges for policymakers in the EU as the most important financial centre in Europe is now outside its regulatory framework. We expect significant divergence over the medium- to long-term, given recent legislative and regulatory initiatives in the UK, but also developments of the regulatory framework in the EU. However, there seem to be limited concerns of an easing of the tax evasion and Anti-Money Laundering framework in the UK. We expect a limited use of the EU equivalence regime for the UK.