However, a key principle underpinning third-country regimes needs to be maintained: we should avoid a situation in which non-EU firms are able to operate across the Single Market on the basis of a different rulebook and without a proper institutional framework. We cannot permit opportunities for regulatory arbitrage and let risks build up in the financial system.
It is also crucial that Brexit does not lead to a race to the bottom in regulatory and supervisory standards, and that the efforts that have been made to strengthen the financial architecture of the EU following the crisis do not unravel. The framework thus needs to provide sufficient safeguards for maintaining financial stability.