U.K. Says Equivalence With EU Unlikely in All Areas of Finance

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The EU is unlikely to grant U.K.-based financial firms automatic market access in all areas post-Brexit, according to a top British minister.

“It’s realistic to assume that probably we’re not going to get equivalences in every area, given the atmospherics coming out of Brussels,” U.K. Brexit minister David Frost said in a webinar Thursday. “But I think the City feels pretty confident about that.”

The ability for London-based businesses to provide financial services into the EU is one of the remaining issues to be resolved in Britain’s post-Brexit relationship with the bloc, and talks are ongoing. An accord on how EU and U.K. financial regulators would cooperate has run into problems as relations have soured, and the European Commission has indicated it’s in no hurry to give the so-called equivalence decisions that would allow European business to be done from London.

The City of London has a significant lead over European rivals such as Paris and Frankfurt as a hub for derivatives and foreign-exchange trading, asset management, venture capital and banking. However, this advantage has been dented by Brexit, with banks such as JPMorgan Chase & Co. and Goldman Sachs Group Inc. moving hundreds of billions of dollars in assets and thousands of staff to the continent.

Frost said the absence of equivalence decisions wouldn’t necessarily impede Britain’s financial center, and that the British government having control over its own laws would be a benefit.

“Dynamism and the ability to experiment that comes with that is going to be more important,” Frost said.

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