By David Milliken
LONDON (Reuters) -Bank of England Governor Andrew Bailey said on Thursday that he hoped there would be closer cooperation in future between Britain and regulators in the European Union on financial services and broader trade issues.
Earlier this month Britain’s government struck a deal with the EU to improve access for agricultural exports and strengthen defence ties in exchange for continued EU access to British fishing waters.
Bailey, in remarks released by the central bank before a finance industry dinner in Dublin, said such steps were welcome as trade restrictions since Britain left the EU in 2020 had weighed on the country’s economic capacity.
“We should do all we can to minimise negative effects on trade,” Bailey said.
The central bank governor said Britain and the EU would also benefit from strengthening financial services ties and that the bloc would be wrong to view such cooperation as primarily benefiting Britain as an exporter of financial services.
“The benefits of open financial markets, as well as the dependencies, tend to go both ways,” he said. “There is merit in seeking to increase the openness of our financial markets by reducing non-tariff barriers.”
Bailey highlighted the regulation of money market funds as an area for future cooperation, following recent work to boost the resilience of liability driven investment (LDI) funds used by British pension managers. Many such funds are domiciled in Ireland or Luxembourg.
(Reporting by David Milliken; editing by Andy Bruce)
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