Politics

Take that Brussels! London still top dog in financial services post-Brexit

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Although Remainers have expressed the fear London could lose its financial dominance, only New York remains ahead of the capital according to recent figures. Even without provisions on financial markets within the Trade and Cooperation Agreement, Frankfurt and Zurich still remain well below London in the Z/Yen’s Global Financial Centres Index. Despite Amsterdam boosting its share trading in relation post-Brexit it is still ranked as 29th in the index.

Although London has dipped by 23 points in this year’s rating – only Shanghai, Hong Kong and Singapore come close.

Catherine McGuinness, policy chair at the City of London Corporation said: “Our financial services sector has demonstrated resilience over the past year, providing stability amid considerable economic uncertainty.

“We remain confident in the City’s future and our long-term fundamentals.

“But we cannot afford to rest on our laurels.

“It is vital that policymakers focus on the UK’s competitiveness, by investing in infrastructure and skills across the country.”

The EU and UK are currently negotiating a memorandum of understanding over financial services.

However, it is not thought the EU will grant UK financial firms equivalence post-Brexit.

This means financial firms will now need to apply two sets of rules rather than just one, which has seen some companies move to Europe post-Brexit.

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The EU has so far refused to hand UK firms equivalence unless London makes guarantees it will not drop regulations to undercut European markets.

Some officials have insisted the UK must forget any idea of gaining equivalence from the EU and instead focus on new challengers in Asia and America.

Tory MP for Hitchen and Harpenden Bim Afolami, claimed there shouldn’t be any concerns for the sector going forward post-Brexit.

Speaking to Express.co.uk, he wanted the UK cannot be sucked into a conflict with the EU and instead look to broaden its horizons.

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He said: “When I speak to people, senior people in the sector, they all tell me, they spend a lot of time thinking about what’s going on in Asia.

“That’s not to say they don’t think about Europe but in financial services terms, our big competitors are the United States, Hong Kong and Singapore.

“And we just shouldn’t lose sight of that by being sucked into a row with the EU over derivative trading, important though it is but actually, the big picture here is we’ve got to have a global outlook.”

In recent weeks, Bank of England Governor Andrew Bailey has stated the City of London will survive without EU equivalence.

He also claimed the EU was attempting to exert full pressure on the UK to poach financial firms to European hubs.

A separate document from the EU Commission was reported to show Europe’s largest banks are being asked to justify why they cannot clear derivatives in Europe instead of London.

In response, Mr Bailey said: “Frankly, it would be a serious escalation of the issue.

“I have to say to you that would be highly controversial – and that would be something that we would have to, and want to, resist very firmly.”

“I’m not going to obviously say how the government would react to that because that’s for the government to think about and we will work very closely with them on this but it would be a very serious escalation in my view of the issue.”

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