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Analysts at TD Securities explain that the reports overnight on a post-Brexit financial services deal do not represent a major breakthrough for the sector.

Key Quotes

“From what details are available, the deal that has been struck is for a form of financial services equivalence. This is, notably, not financial services passporting. Equivalence is an EU designation shared by other countries such as the US and Canada, and allows for some friction-less trading in financial services, but importantly, still requires EU subsidiaries for a number of functions.”

“Importantly, for the last six months, both sides have communicated that this was the ultimate goal for the sector. The UK and the EU have therefore only formalised something that had been publicly acknowledged for quite some time. At best, it marks continued gradual progress toward a deal on the Withdrawal Agreement, which we expect to be signed off later this year.”