LONDON (Reuters) – Britain on Sunday downplayed the risk of the European Union withdrawing business 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 in late 2020, but the last-minute free trade agreement that replaced membership in the bloc did not include arrangements for free trade in financial services, the engine of the British economy.
Data released on Thursday showed that Amsterdam has displaced London as the largest stock trading center in Europe after Britain left the EU single market and picked up a share of the British derivatives business.
“If we are really honest about it, the challenge of London as a global financial center around the world will come from Tokyo, New York and other areas, rather than these European centers, especially if they start erecting barriers to trade and investment.” , Foreign Minister Dominic Raab told the BBC.
Britain has not yet been granted equivalence status in the regulation of financial services that would free up trade, because the EU says it needs information on Britain’s intentions to diverge from EU rules. Britain says it has provided all the necessary paperwork.
Raab said the EU runs the risk of undermining its own competitiveness if it puts up barriers in order to “get some business out of the city here and there.”
The EU authorities had already made it clear that they wanted the euro-denominated financial activity to move from London to build their own capital market under the direct supervision of Brussels.
Reports of William James; Edited by Gareth Jones and Barbara Lewis