Britain on Sunday downplayed the risk of the European Union taking business away from the City of London after Brexit, saying the real challenges come from New York, Tokyo and other areas.
Britain completed its exit from the EU at the end of 2020, but the last-minute free trade deal that replaced membership of the bloc did not include arrangements for free trade in financial services – the engine of Britain’s economy.
Data published on Thursday showed Amsterdam has displaced London as Europe’s biggest share trading centre after Britain left the EU’s single market, and picked up a chunk of British derivatives business.
“If we’re really honest about it, the challenge to London as the global financial centre around the world will come from Tokyo, New York, and other areas, rather than from those European hubs, particularly if they start to erect barriers to trade and investment,” foreign minister Dominic Raab told the BBC.
Britain has yet to be granted the equivalence status on financial services regulation that would free up trade, because the EU says it needs information about Britain’s intentions to diverge from EU rules. Britain says it has supplied all the necessary paperwork.
Raab said the EU risked undermining its own competitiveness if it put up barriers in order to “nick a bit of business here and there from the City”.
EU authorities have previously been clear that it wants euro-denominated financial activity shifted from London to build up its own capital market under direct Brussels supervision.