Article

UK: The European Banking Authority leaves London.


Added on 03/06/2019

As extracted from forbes.com, published on Friday 31st May, 2019.

 

May 30, an important part of London’s influence in the European financial world quietly slipped away. The European Banking Authority (EBA) closed its Canary Wharf office. There was no press release, no news report, only a statement on its website giving its new address. On Monday, June 3, it will re-open in Paris, France.

The Europlaza tower, where the London-based European Banking Authority (EBA) has just relocated, stands in the La Defense business district in Paris, France, on Wednesday April 10, 2019. The Paris region government has been a key driver of France’s Project Brexit. Photographer: Christophe Morin/Bloomberg

The Europlaza tower, where the London-based European Banking Authority (EBA) has just relocated, stands in the La Defense business district in Paris, France, on Wednesday April 10, 2019. The Paris region government has been a key driver of France’s Project Brexit. Photographer: Christophe Morin/Bloomberg © 2019 BLOOMBERG FINANCE LP

The EBA’s relocation is, of course, due to Brexit. In January 2017, the U.K.’s Prime Minister, Theresa May, announced that the U.K. would leave the EU’s Single Market (SM) and end the jurisdiction of the European Court of Justice (CJEU) in the U.K. From that moment onwards, the eventual departure of the EBA, along with its sister the European Medicines Agency (EMA), from the U.K. was certain.

The U.K. tried hard to hang on to the EBA. The Department for Exiting the EU (DexEU) claimed that its future was “a matter for negotiation.” But the EU negotiators saw it differently. The EBA is a Single Market institution operating under EU law. No way could it remain in a country that was leaving the Single Market and repudiating the CJEU’s jurisdiction.

Mrs. May’s fateful decision was the first of many blows to the City of London over the course of the Brexit negotiations. At the time, many people thought that British financial institutions would retain passporting rights to the European marketplace. So the EBA’s relocation didn’t seem that big a deal. But now, over two years on, there is no agreement that would preserve existing access to the EU for City institutions. Passporting rights are for the birds, and even regulatory equivalence is by no means certain.