Lord David Frost said the City of London had to ‘fend for itself and do its own job’ after Brexit as he suggested equivalence might be unlikely. The Brexit minister also told a House of Lords committee last month that Brussels will continue to make equivalency decisions that are “in their best interests”. UK financial firms lost their broad access to EU markets when the Brexit transition period ended on December 31 and must now navigate a patchwork of member state regulations.
However, the bloc believe the UK is destined to deviate from its financial services regulations and have withheld the designation.
John Garvey, global head of financial services at PwC, told The Telegraph that while he doesn’t expect a deal imminent, there will come a time when Brussels realizes that a deal is in its own best interests.
In an exclusive interview with Express.co.uk, Italian MEP Antonio Maria Rinaldi accused the EU of trying to punish the City of London over Brexit.
However, he insisted that Brussels will ultimately fail as City emerge stronger thanks to Britain pulling out of the bloc.
“The EU can impose whatever taxes it wants, but in the end it is market competition that will triumph.
“And since the City’s tradition is superior to any other place, it will remain the main European financial center. “
He added: “I wouldn’t worry that much… they said five years ago that Brexit was going to be an apocalypse.
“I think it was a godsend instead. “
Despite admitting that the trade deal struck with the EU on Christmas Eve failed to meet his financial services ambitions, Prime Minister Boris Johnson has consistently dismissed warnings that European financial centers could steal supremacy from the City of London.
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The Prime Minister said: ‘One tube stop and you will be in Canary Wharf where, along with its older siblings in the city, billions of pounds of capital are being raised for every business you can think of, from construction French to Africa from telecommunications to American anticancer drugs.
“It may give you an idea of the scale of financial services in London when I say that Canary Wharf on its own is a bigger banking center than the whole of Frankfurt.
“We have technology, technology of all kinds, and we have by far the largest tech sector in this hemisphere. “
Earlier this year, Chancellor of the Exchequer Rishi Sunak hailed the potential for a ‘Big Bang 2.0’ in the City of London after Brexit, hinting that the government was ready to cut red tape.
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He stressed that while equivalency and other elements were important, his main goal would be to ensure that the Square Mile “remains the most dynamic place to offer financial services anywhere in the world”.
In an interview with City AM, Mr. Sunak said “there are a lot of things in the deal that are good for financial services.”
He cited the free flow of data, business travel and agreements on legal and professional services – while suggesting that an agreement on the regulations will be reached soon.
Mr. Sunak told the publication, “There is strong language about future regulatory cooperation and putting in place a memorandum of understanding within a reasonably short time frame to have this structured regulatory dialogue.
“And there is also a forum for future equivalency decisions. It’s positive.
“But regardless of all that, I think it’s important that we get along and make sure that the City of London remains the most dynamic place to offer financial services all over the world. “
Referring to Brexit enthusiasts who claim the city can now enjoy another ’90s-style leap forward, Mr Sunak said they’ make a very, very good point ‘, adding that people were free to “call it Big Bang 2.0 or whatever”.
He added: “If you look at the history of the city going back even further than that, it has always constantly innovated, adapted and evolved to changing circumstances and has thrived and prospered as a result. And I think she will continue to do so. “
Mr Sunak said the Treasury “will play a role in this, and all the companies and people involved will help us to do so.”
However, the Chancellor also downplayed the need for fundamental change in the city, highlighting its natural advantages and the “culture and creativity of our people”.
He noted: “Regulation is important, of course, as is the time zone, as is the language. All of these things are important. “