The financial industry including private equity should do more to promote its interests regarding Brexit, according to the European Commission’s former deputy director-general for securities and financial markets.
“I don’t think we’ve heard nearly enough from the financial industry. [There are] not enough people courageous enough to speak,” David Wright said at listed private equity association LPEQ’s Annual Investor Conference in London on Thursday.
“Where we are with Europe is a national tragedy,” he said. “We need strong investors in a European market, and hopefully in that European market the UK will find some common sense and continue to participate.”
Implementing a regional cross-border e-trading system could help to reduce market fragmentation, and an Ali Baba-style platform would provide greater transparency into the growth and quality of European businesses, he said. This could help to break down cross-border barriers which may form due to the UK’s departure from the single market, he added.
Wright predicted two possible outcomes from the upcoming Brexit negotiations if the UK leaves the EU Customs Union and single market. One option would be mutual recognition in a cross-border, free-trade area.
“The UK becomes a rule-taker … we can give our views but we’ll have no influence on the outcome,” he warned.
Another option could be access to the World Trade Organisation – a suggestion Wright was quick to dismiss.
“I was a trade negotiator and, [as] much as I admire the WTO and its precious dispute settlement system, on services and financial services it is a three-legged animal. There’s very little on financial services that’s going to help this country, because there’s a potential carve out which allows countries to do whatever they want.”
Wright’s comments follow warnings that variations to marketing rules and procedures across European member states are also creating barriers to cross-border alternative investment fund distribution.