There is no general EU framework, but equivalence varies from any limited or very extensive provision in the existing legal framework for the free movement of financial services and products in the EU. In total, there are about forty areas in which equivalence decisions are possible, but with a few exceptions, they do not offer the full freedom of a given measure. The European Commission recently sent questionnaires to around 28 different areas in the UK, but received few responses. The extent of liberalization of the services sector under the GATS is small. The number of sectors that the EU is prepared to open to third countries is small and, therefore, the agreements that can be negotiated for trade in services should be less ambitious than trade in goods. [...] 36 In the long term, the EU will have to adapt to the loss of its main financial centre and the UK will have to prepare to lose some of its EU customers. There will be losses. In the UK and London in particular, the international competitive advantage over other major financial centres in the world (especially New York) is expected to be undermined, although Britain is likely to manage to develop other areas of international business. For Europe, it is likely that financing costs will increase overall for public and private borrowers. However, it is possible that services within the euro area are more fragmented and therefore dispersed. This will probably mean higher costs, but it may contribute to more balanced growth and more balanced development within the EU.
17 There are reservations. First of all, not all financial activities on the basis of equivalence are accepted. This is particularly true for banking services for which the EU does not accept equivalence. In accordance with the EU Capital Requirements Directive (CRD IV) and the Regulation (CRR), retail and wholesale banking services provided by UK-based financial institutions do not have access to the internal market: equivalence is not a substitute for passports, which is important for a significant part of the business between the UK and the EU (see below). Similarly, retail investment services (regulated by the EU Markets in Financial Instruments Directive and The Financial Instruments Regulation (MiFID II and MiFIR) will no longer have access to the EU market. The same applies to investment funds regulated by the 2009 European Directive on Undertakings for Collective Investment in Transferable Securities (UCITS). Insurance will be the other main activity that will be affected by the loss of passports under the Solvency II Directive, while reinsurance services (a wholesale business-to-business activity) will continue to have access to the EU market.16 The EU`s draft FREI (FTA) agreement also includes another group: the short-term mobility of individuals for reasons that have nothing to do with activities. It is important that financial services are also excluded from the scope of Chapter 12 on national regulation, which covers licensing requirements and procedures. .