LONDON (Reuters) – Britain on Sunday minimized the risk of the European Union taking business from 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 free trade agreements for financial services – the engine of the British economy.
Data published on Thursday showed that Amsterdam replaced London as Europe’s largest stock trading center after Britain left the EU’s single market and acquired a slice of the British derivatives business.
“If we are really honest about it, the challenge for London as the global financial center around the world will come from Tokyo, New York and other areas, and not from those European centers, especially if they start to raise barriers to trade and investment,” Chancellor Dominic Raab told the BBC.
Britain has not yet received equivalence status in the financial services regulation that would free trade, because the EU says it needs information about the UK’s intentions to diverge from EU rules. Britain claims to have provided all the necessary paperwork.
Raab said the EU is at risk of undermining its own competitiveness if it puts up barriers to “steal some business here and there in the city”.
EU officials have already made it clear that they want the euro-denominated financial activity to be transferred from London to build their own capital market under the direct supervision of Brussels.
William James reporting; Editing by Gareth Jones and Barbara Lewis