Britain wants a stable relationship with the European Union for “decades to come” in financial services, finance minister Sajid Javid said on Tuesday, only to receive an instant rebuttal from Brussels.
Britain left the EU last month and its large financial services sector will lose privileged access to EU customers from January 2021. Financial firms would be able to service those clients only in sub-sectors where rules are deemed “equivalent”.
Javid urged the EU to consider Britain’s financial sector “equivalent”, a reference to the bloc’s system of financial market access, based on Brussels acknowledging that UK regulation is as robust as the EU’s.
“This is important not only in the short term, but to establish the norms and ways of working with the EU that will endure for decades to come,” Javid said in an article in City AM newspaper.
Replying to a lawmaker’s question later in parliament, Javid said the EU should continue to recognise the UK as meeting the EU’s equivalent regulatory standards because “on day one (Jan. 1, 2021) we will have exactly the same rules”.
However, EU chief Brexit negotiator Michel Barnier said London should be “under no illusion” on financial services as there would be “no general, global, permanent equivalence” with Britain.
“There will be no common management,” Barnier told the European Parliament in Strasbourg.
Equivalence only covers some financial activities, basic banking is excluded, and Brussels can in theory scrap access with just 30 days’ notice in some cases.
Britain and the EU have agreed to make such an assessment by the end of June, but Brussels says actual financial market access will be linked to broader trade issues such as fishing rights.
Bank of England Governor Mark Carney has spoken against Britain becoming a taker of EU rules.