trending Market Intelligence /marketintelligence/en/news-insights/trending/Qm5OuBAnaKkC2AsM6Xjkrg2 content esgSubNav
In This List

Report: Brexit Secretary 'not really interested' in transitional deal


Street Talk Episode 87


A New Dawn for European Bank M&A Top 5 Trends


Insight Weekly: US banks' loan growth; record share buybacks; utility M&A outlook


Banking Essentials Newsletter 2021: December Edition

Report: Brexit Secretary 'not really interested' in transitional deal

The U.K.'s Brexit Secretary David Davis said he is "not really interested" in seeking a transitional arrangement to smooth over Britain's departure from the EU, the Financial Times reported Dec. 9.

A leaked memo of Davis' private meeting with the City of London Corporation in November reportedly revealed that he had dismissed calls for a transitional arrangement beyond the two-year Brexit negotiation period, saying such a deal would not benefit the U.K. and could delay its departure from the EU.

However, he acknowledged that the stability of the EU could be compromised by Britain's "sudden" departure, and that if the bloc asked Britain for a transition agreement, he will be "more in favor" of it in order to "be kind" to the EU, the FT added.

Davis also expressed his skepticism over banks' warnings of relocating to Europe given the "unattractiveness of Frankfurt and other cities in the EU," the memo said. He reportedly added that other EU member states such as France had "no faith" in their economic models as well as their capacity to compete with an "Anglo-Saxon approach."

The official also said that, in the event that the EU pushes for a punishing settlement, he would switch to a tougher, alternative strategy wherein the U.K. would take a more competitive stance to lure businesses by offering "lower tax, softer regulation and other strong business incentives," the FT noted.

British banks have reportedly urged U.K. Prime Minister Theresa May to guarantee that the nation's exit from the EU will start with a transitional deal that would maintain their access to the bloc's single market for several years.