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UK presses EU on post-Brexit financial services deal

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Financial services were largely omitted from the Brexit trade deal agreed between the UK and the EU

Bank of England governor Andrew Bailey on Wednesday pressed the EU to agree a post-Brexit financial services deal by next month for the sake of pandemic recovery on both sides of the Channel.

The costs of the City of London’s lack of access since Brexit were laid bare in new data showing Amsterdam last month overtook London as Europe’s top share trading hub.

Rebutting some of the demands made by Brussels in return for the City to regain access to EU states, Bailey said Britain had no intention of creating “a low-regulation, high-risk, anything-goes financial centre and system”.

We have an opportunity to move forward and rebuild our economies, post-Covid, supported by our financial systems. Now is not the time to have a regional argument, the UK central banker said in a speech.

Financial services — a key driver of the British economy — were largely omitted from the last-minute Brexit trade deal agreed between London and Brussels in late December.

So from January 1, Britain’s financial sector lost access to the EU’s single market and its European “passport”, a means for UK financial products and services to be sold in the EU.

Both sides are instead working towards a March deadline to carve out an “equivalence” regime under which each would recognise the other’s financial regulation.

In its absence, Euronext Amsterdam together with two other Dutch share markets last month displaced London’s historic role as the main equities hub for Europe, the Financial Times said.

An average of 9.2 billion euros ($11.2 billion/£8.1 billion) in shares were traded each day on the Amsterdam markets in January, more than four times their December figure and higher than London’s 8.6 billion euros, the FT said.

However, UK officials have played down fears of an accompanying exodus of jobs from London.

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