Ms Mairead McGuinness:

I thank the Deputy for the question and his kind words. On the general Brexit point, much of the focus is on the trade agreement and the withdrawal agreement. Of course, there is an impact on the financial sector. At the moment and when the UK was part of the EU, London was our financial centre and a very large one. There were other centres but London was a major one.

In the process of Brexit, we have looked at areas where there were risks to financial stability that might impact us. We have made decisions in a limited number of areas to protect financial stability. This is done through equivalence decisions. We give equivalence, so in other words, what is happening in the UK is equivalent to the EU in areas of significance to us in the European Union.

The Deputy points to a wider question. Come 1 January, when the UK is a third country, London will still be a major financial centre. There is then a question for us to look at in greater detail for the future. Is it appropriate that the European Union would be reliant on a major financial centre in a third country which we are not the regulator of? Already there is some movement of businesses and assets from London because of this, although not to a significant extent yet. There might have been an expectation that things would work out. We have asked the United Kingdom in a range of areas to provide answers to particular questions relating to making decisions about where they intend to be in the future and how that will sit with our rule book around financial services. We continue to look for that information. As of now, the passporting which UK firms could, because they were part of the European Union, operate across borders in the EU will go. There will be significant change.

On the specifics of the Deputy's question about opportunities, that has to be answered by the member states looking at what they want in terms of financial stability for the European Union. Some believe we need one centre within the European Union. Perhaps that is not necessary in a more digital world. There may be room for other centres, but we have to ask ourselves a question about whether we want to be overly reliant on the City of London when it comes to the entire financial sector. There are potentially opportunities there. There are many who want to hold everything within the City of London. Perhaps it goes back to the general point I made that a member state is part of everything that goes with being a member state. If a state opts out, there are consequences to that. There are consequences for the City of London which players and stakeholders there are well aware of.

There will be an issue if there is no deal. Tensions arise when negotiations take place. Trust can be strained. If there is no deal, it makes life that little bit more difficult in terms of the relationships we would have, at least in the short term. The issue of the financial services coming from the City of London will come home to us to be dealt with in greater detail from 1 January onwards. We have taken decisions where it was necessary and we are watching other areas. The committee will be aware that the UK has granted a number of equivalents to the European Union in areas that it felt were important, but we have not reciprocated because they are not areas of significance from an EU perspective. It is an area with potential opportunities and challenges and we need to be aware of both.