Kieran Donoghue, the Irish Development Authority’s Global Head of Strategy, Public Policy and International Financial Services examines the continuing uncertainty around Brexit and role that Ireland can play as a strategic partner to the United Kingdom’s (UK) financial services industry.
Finance teams were truly put to the test last year. Many businesses were forced into survival mode and some, unfortunately, did not make it through the pandemic. Covid-19 forced entire sectors to close, with knock-on effects on other industries, and the UK’s GDP declined by 9.9% in 2020.
The UK has long been regarded as one of the most regulated countries in the world when it comes to the financial services sector. Arguably much of this has been driven by membership of the EU, and the numerous money laundering directives we’ve adhered to over recent years. However, the UK will still be one of, if not the most strictly regulated countries even after Brexit – as the City of London needs to continue to be seen as beyond reproach as a financial institution.
Are you wondering how to invest in 2021, a year that is starting with concerning negatives but also hopeful positives? Although predicting how this year will wind up is difficult, the investor can take steps to make the most of what is guaranteed to be another wild year of ups and downs, including capitalising on inflation surges, capturing cyclical upswings, looking to emerging markets for credit opportunities and harnessing volatility.
With just a week left before the December 31, 2020, transition-period deadline, the United Kingdom and the European Union (EU) finally agreed to new post-Brexit trading arrangements and, in doing so, avoided a potentially disastrous no-deal scenario. But conspicuously absent from the trade deal are rules governing the financial-services sector.
The UK will complete the Brexit journey that it began four years ago on December 31, the final day of the transition period. Its future trade relationship with the EU is not definite, and the British are wisely preparing for a hard landing. This time of transition should be regarded as an opportunity to build a united country, one that is in a mutually beneficial trade partnership with the world.
The European Bank for Reconstruction and Development has a long history of investing in emerging markets, and its contributions are most constructive during crises. With the global economy reeling from COVID-19, the EBRD ramped up its efforts to be a partner to key players in the markets in which it invests, providing emergency financing and policy direction with a focus on fostering a green economy characterized by inclusion and digitalization.
The Bank of England (BoE) announced on Thursday, September 17, that the Monetary Policy Committee (MPC) had voted unanimously to leave its benchmark bank rate at 0.1 percent whilst also maintaining the target for the total stock of asset purchases under its quantitative-easing (QE) programme at £745 billion.
According to figures released on Friday, September 11, by the Office for National Statistics (ONS), the United Kingdom’s gross domestic product (GDP) expanded by 6.6 percent during July, as lockdown measures in the country continued to ease and the economy showed clearer signs of recovery.
The pandemic has prompted financial institutions to adapt fast, but the UK’s financial sector was already embroiled in a Brexit-induced metamorphosis. Although crises spawn revolutionary transformations, the sector’s need to transform digitally and accommodate regulations was in place beforehand. COVID-19 shifts the goalposts while offering opportunities for Britain’s fintechs to use their new-found freedom to innovate their way into a more prosperous future in which clients’ evolving needs are met.