Paul Hodgson, chairman of the Guernsey International Business Association, said local financial services businesses would not have been anticipating the UK would be granted so-called regulatory equivalence by the EU – which would allow renewed access – and that it now seemed increasingly unlikely came as no surprise.
‘Our historic connections have always been much closer to the UK, and the City in particular, than the EU. So there will be concerns as to the potential for this to negatively impact on those areas which share relationships with Guernsey,’ he added.
But it was important to note the City was arguably the most sophisticated financial services ecosystem globally and a hub for innovation and development – as well as a powerhouse in terms of existing business.
‘It is the need to maintain its position at the forefront of global finance which underpins the need for regulatory independence as a significant competitive advantage, a characteristic which Guernsey shares.
‘As such, on balance, I believe that the current uncertainty is a necessary precursor to the next phase of growth of financial services in the UK – and Guernsey.
‘This will ultimately benefit both of us, but also the EU as it will facilitate EU access to global capital markets in order to meet its own demand for inward investment, particularly in order to overcome the huge costs of the pandemic on its economy.’
Earlier this month, it was reported by CityAM that a top City of London Corporation official said it was too late for the UK to strike a ‘fish for finance deal’ to ensure renewed access to the EU.
Nick Collier, managing director of the City of London Corporation in Brussels, warned UK-EU ‘levels of trust are low’ and that it could take 10 years to repair.
Meanwhile, French ministers have reportedly said they will block any attempts to agree equivalence for the City of London if their fishermen do not get better access to UK waters.