This paper examines the state of the art of the Brexit negotiations in the area of financial services. It uses a two-level game model to first explain the positions of UK and EU negotiators on the basis of the domestic constraints they face, and second, to consider the scope for final agreement based on the 'win-set' of both sides. The paper analyses the preferences and power of three main groups of players within the UK and EU: the political authorities, financial regulators, and the financial industry. We argue that the scope for agreement on financial services has been severely hampered by political and regulatory constraints which forced UK and EU negotiators to adopt early hawkish negotiating positions, and by the absence of a unified position from the financial industry. After the 2017 general election, the position of the UK government and UK financial industry briefly converged, thereby narrowing the domestic win-set, but also increasing the scope for agreement. However, the July 2018 'Chequers' deal represents a hardening of the UK government's position on financial services. We argue that this reflects the fact that the twin pressures facing UK negotiators-acute political constraints at home and bargaining weakness in Brussels-has become more, not less, acute over time.

The Brexit Negotiations and Financial Services: A Two-Level Game Analysis / James S.; Quaglia L.. - In: THE POLITICAL QUARTERLY. - ISSN 0032-3179. - ELETTRONICO. - 89:4(2018), pp. 560-567. [10.1111/1467-923X.12597]

The Brexit Negotiations and Financial Services: A Two-Level Game Analysis

Quaglia L.
2018

Abstract

This paper examines the state of the art of the Brexit negotiations in the area of financial services. It uses a two-level game model to first explain the positions of UK and EU negotiators on the basis of the domestic constraints they face, and second, to consider the scope for final agreement based on the 'win-set' of both sides. The paper analyses the preferences and power of three main groups of players within the UK and EU: the political authorities, financial regulators, and the financial industry. We argue that the scope for agreement on financial services has been severely hampered by political and regulatory constraints which forced UK and EU negotiators to adopt early hawkish negotiating positions, and by the absence of a unified position from the financial industry. After the 2017 general election, the position of the UK government and UK financial industry briefly converged, thereby narrowing the domestic win-set, but also increasing the scope for agreement. However, the July 2018 'Chequers' deal represents a hardening of the UK government's position on financial services. We argue that this reflects the fact that the twin pressures facing UK negotiators-acute political constraints at home and bargaining weakness in Brussels-has become more, not less, acute over time.
2018
The Brexit Negotiations and Financial Services: A Two-Level Game Analysis / James S.; Quaglia L.. - In: THE POLITICAL QUARTERLY. - ISSN 0032-3179. - ELETTRONICO. - 89:4(2018), pp. 560-567. [10.1111/1467-923X.12597]
James S.; Quaglia L.
File in questo prodotto:
Eventuali allegati, non sono esposti

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11585/706881
 Attenzione

Attenzione! I dati visualizzati non sono stati sottoposti a validazione da parte dell'ateneo

Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 17
  • ???jsp.display-item.citation.isi??? 15
social impact