a sensitive issue. according to their brexit white paper published last week, the uk government will strive for an ambitious free trade agreement with the eu as a long - term solution. but financial services are an especially tricky area. so far, the eu has never fully integrated finance in its free trade agreements with third countries. 2. 2 location decisions consequently, many banks are now considering moving some of their business to the eu. you can read reports about major firms taking new decisions daily – some are true, some are rumours. first, let me say that i expect london to remain an important financial centre. nevertheless, i also expect many uk - based market participants to move at least some business units to the eu in order to hedge against all possible outcomes of the negotiations. the question that is causing some excitement is : where will banks go? as a supervisor, my main concern is that banks are supervised according to standards that are both high and consistent. this is best ensured within the ssm area, which means i will not promote any particular financial centre. that said, i am open for dialogue with financial institutions in assessing the conditions for moving business units to germany. financial institutions are right to contact their potential future supervisors early on. and numerous market participants have already contacted the ecb, bafin and the bundesbank. we respond to such requests pragmatically. that is, we provide financial institutions with quick and reliable guidance and clarity on the requirements for establishing a licensed entity here in germany and aid a smooth transition. one important issue in this regard are the rules related to outsourcing. here, we explain that german law requires any subsidiary domiciled in this country to retain chief responsibility for its business. this means that we will not accept any empty shells or “ letterbox companies ". 2 / 4 bis central bankers'speeches 2. 3 future of clearing market access and location decisions are the primary point of interest. a close second is the future of clearing in the uk. will uk - based clearing houses be stripped of their ability to clear euro - denominated transactions? at present, the eurosystem does not have regulatory competence to restrict clearing in the uk. however, continuation of clearing strongly depends on the acceptance of the european court of justice, as mario draghi emphasised yesterday. and so far, the uk government has indicated that it would leave the european court of justice after brexit. furthermore, the eu has introduced clearing obligations for some interest rate

andreas dombret : uncertain times - brexit and its impact on the financial sector remarks by dr andreas dombret, member of the executive board of the deutsche bundesbank, to boston consulting group, frankfurt am main, 7 february 2017. * * * 1. introduction ladies and gentlemen thank you very much for the kind introduction. since june of last year, brexit has held our attention. it is one of the few topics that have endured in the news despite the trump administration taking office. the reason lies in the intense uncertainty surrounding brexit and its exact implications. i expect this is also what brought most of us here today. we are all looking for answers. the political debate surrounding brexit became increasingly tense recently. it seems that the closer we get to the start of the divorce proceedings, the louder the sabre - rattling becomes. and there is clearly a lot at stake for both the european union and the united kingdom. many complex problems will need to be resolved, and tough decisions will need to be made over the months and years ahead. but a confrontational approach is not in the interest of either the uk or the eu. interconnectedness between the uk and the eu is significant in terms of both the real economy and financial markets. a cooperative stance that perpetuates the close links between our economies is now called for. and i hope that this will be the guiding principle of negotiations. 2. major questions regarding brexit this period of uncertainty is not the time for speculation, but for scenario - based thinking. and at the bundesbank, we are looking into different scenarios and outcomes, especially for the financial sector. let me now give you a broad idea of my thoughts on some of these issues : first, on everything related to market access and the location decisions of banks. second, i will touch upon the question of what brexit means for the future of clearing in london. i will then close with some thoughts on the preparations banks on both sides of the channel are making for brexit and the prospects for future regulatory regimes in the eu and the uk. 2. 1 future market access the debate on market access for uk - based financial institutions was transformed mid - january. after prime minister may ’ s most recent speech, a “ hard ” brexit is to be expected. for the financial industry this means that the current model of using london as a gateway to europe is likely to end. banks from third countries would