London Finance Frets Johnson Will ‘Sacrifice’ Industry in Talks

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(Bloomberg) --

The City of London wants Prime Minister Boris Johnson to slow down in his race for a trade deal with the European Union.

“It is critical the services sector is not sacrificed in the rush to get a deal,” said Catherine McGuinness, policy chair at the City of London Corp., which administers London’s financial district.

Hours before that Monday statement, Johnson and EU chief negotiator Michel Barnier clashed in their initial salvos to kick off 11 months of talks. Barnier said a “highly ambitious” deal is on offer if Johnson agrees to strict rules to prevent unfair competition. Rejecting Barnier’s demand. Johnson insisted the U.K. will thrive even if negotiations fail.

Read more: How ‘Equivalence’ Will Decide Future of U.K. Banking

McGuinness called it essential that “highly interconnected U.K. and EU financial services sectors are able to maintain access, while aligning with global rules to avoid unnecessary costs and bureaucracy.”

Wall Street banks and London financial firms are worried they’ll lose easy access to the EU if Johnson’s government splits with EU rules. The services sector accounts for about 80% of U.K. economic output and about a million financial-services jobs.

Banks such as Goldman Sachs Group Inc. and JPMorgan Chase & Co. use London as their base for doing business with European Union clients. The big U.S. banks have been regularly meeting with officials from the U.K. Treasury to emphasize the importance of winning so-called equivalence from the EU, which would allow them to largely keep their current structure, according to half a dozen bankers who spoke on condition of anonymity.

©2020 Bloomberg L.P.

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