On Wednesday, the European Union (EU) opened a path for cooperation with the United Kingdom on financial services regulation by adopting a protocol that had been blocked due to tensions over Northern Ireland since Brexit.
The European Commission, the EU’s executive body, announced the adoption of a draft memorandum of understanding setting out a framework for cooperation in this area. Although a memorandum of understanding between the UK and the EU had been defined in March 2021, it was never signed because relations deteriorated rapidly due to the reform of trade rules for Northern Ireland.
After difficult negotiations, this issue was resolved at the end of February this year in an agreement known as the “Windsor Framework.” With the aim of advancing cooperation on financial services regulation, the Commission took the initiative to adopt a draft protocol that has yet to be approved by the 27 EU countries.
The proposed understanding would include the creation of an EU-UK Joint Financial Regulatory Forum, where regulators from both sides would be able to discuss financial services issues. European Commissioner for Financial Services Mairead McGuinness stressed in a statement that the “Windsor Framework” made it possible to open a new chapter in the EU-UK partnership based on a spirit of mutual trust and cooperation.
McGuinness expressed confidence that the relationship and future engagement in financial services will be based on a shared commitment to preserving financial stability, market integrity, and the protection of consumers and investors.