ABSTRACT
Brexit will have far-reaching implications for financial integration and regulation in the European Union (EU), as well as for the financial sector in the United Kingdom (UK). Although the policy implications of Brexit will depend on the deal eventually agreed by the EU and the UK, it is possible to discuss the most likely effects on the basis of past trends and ongoing developments (for a comprehensive legal analysis, see Alexander et al. 2017; for an economic analysis, see Batsaikhan et al. 2017). In the past, the UK’s market-making approach to financial regulation contributed to boosting financial integration in the EU and made EU financial regulation more market-friendly and open to third countries than it would have been otherwise. After Brexit, financial integration between the EU27 and the UK will diminish, EU financial regulation will become more market-shaping, and the access of third country entities and products to the EU financial markets will be more strictly regulated. At the same time, the UK will strive to increase its (already significant) influence in international standard setting so as to compensate for the loss of (direct) influence on EU financial regulation.
