b'Below are the comments of DanielHodson, Chairman of City for BritainThe EU will continue to depend onand a widely-respected figure in the the City post Brexit and any attempt tofinancial world, about the above. move euro dominated transactions orbar EU27 based participants will createThe specific issues illuminated by the systemic risk, reduced liquidity,author in this chapter are: additional costs for firms and users,and greatly increased capital Inside the EU UK financial services requirements. A favourable financialcould continue to be damaged by services chapter to an FTA with the EUcurrent and future EU regulatory culture should therefore in theory and subjectbased on an increasingly federalist and to external political influence beoverprescriptive approach with the attainable.prospect of a single rulebook and theever increasing demands of theeurozone. The key issue here is the liquidity anddiversity of City markets, which isI would merely add that this approach is simply not replicable elsewhere,also of course an example of the British liquidity being the mercurial quality thatyou can do it unless we say you cant it is. Another, unmentioned asset is theapproach, as opposed to the French City clearing activity, based round theCode Napoleon based you can only do London Clearing House, a somewhatit if we say you can and the basic technical but fairly central issue. Theoverstructuring and multiplicity of EU cost of margining would beinstitutions. substantially increased without theoffsets available through multicurrency, The measures and issues involved multiproduct clearing in London,have led to costly, disproportionate, rendering it far less attractive to theprotectionist and anti innovation clearing organisation.regulation which include MIFiD II,AIFMD, Solvency II, Financial The only additional point I would makeTransaction Tax (FTT), short selling, now is that the City seems now to bebonus caps, unnecessarily complicated pretty well prepared for almost anyconsumer protection, and have Brexit negotiation outcome, including ofimpacted SME financing. course a WTO based exit. To thatextent it is far less of a piece ofYes, and I would particularly emphasise negotiating leverage available to thethe one size fits all attitude which EU.creates the sort of cost andadministrative problems faced by - Daniel Hodsonsmaller firms driving them out of many Vice Chairman of the Foundation formarkets to the benefitand protection Independence, Chairman of The City for Britain, of the big multinational players. and a director of Vote Leave.Previously CEOof LIFFE, Gresham Professor of Commerce,and Deputy Chief Executive of NationwideBuilding Society.194'