By Huw Jones
LONDON (Reuters) – Britain will seek to reset relations between the City of London and the European Union on Thursday, saying it will stick to high standards in finance and not do anything to undermine financial stability in the bloc in the wake of Brexit.
About 7,000 jobs moved from Britain to the continent after the City lost most of its unfettered access to the EU’s markets because of Brexit, forcing banks, insurers and asset managers to open EU hubs to avoid disruption to clients.
Britain has since proposed its “Edinburgh Reforms”, a package of over 30 measures to update market rules, raising suspicion in Brussels that it was attempting to win business by easing rules, particularly after a high-profile spat with the Bank of England over loosening insurance capital requirements.
“Let me be completely clear, we do not want, in any way, to deregulate for the sake of deregulation. And in no way will we put European financial stability at risk,” Britain’s financial services minister Andrew Griffith will tell a financial services conference in Berlin according to a finance ministry statement.
“It would not benefit anyone to do so,” Griffith will say, adding that the City’s success is, in addition to language, a well-established legal system and skilled workers, down to its high regulatory standards.
Included in Britain’s trade deal with the EU is a memorandum of understanding (MoU) for a financial regulatory cooperation forum, copying what the United States already has with the bloc to discuss and iron out issues, seen as key to warmer relations.
Britain and Brussels have already clashed over moves by Brussels to force banks in the EU to shift euro derivatives clearing from London to Frankfurt.
Brussels, however, has said it would not rubber-stamp the MoU until disputes over Northern Ireland were resolved.
Earlier this week, Britain and the EU agreed on a “Windsor Framework” to settle disputes over Northern Ireland, opening what both sides called a new chapter in their relations.
“In financial services, the Treasury stands ready to continue conversations with our European partners on enhancing regulatory cooperation,” Griffith will say.
He is due to visit other European capitals in coming weeks and months to “broaden and deepen” relations in financial services, the ministry said.
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