The British government seeks its financial centre, known as the City of London, to have a permanent access to the European market once the Brexit transition period is done, the Financial Times reported on Monday.
The UK stopped acting as a full member of the European Union on January 31, but it has yet to outline its future trading arrangements with the other 27 EU countries. A negotiating paper, caught by a long-lens camera, showed on Monday that the government is seeking to get a “comprehensive, permanent equivalence decisions” for its financial industry, according to the report.
This would mean that the EU would give market access in specified activities provided that the UK follows the same regulatory rules as Brussels. Financial services stood for about 7 percent of the U.K.’s total output in 2018, according to a report from the U.K. Parliament. These firms are currently allowed to operate freely across EU nations. This allows U.S. firms based in the U.K. to sell financial products to EU-based companies, for example. However, the EU has signalled that if this is to continue it will rely on whether the UK decides to abide by the European standards.
In December, the EU’s financial services chief Valdis Dombrovskis said that Brussels is ready to cut off market access to the EU if the UK decides to deviate from European regulations. UK Prime Minister Boris Johnson, meanwhile, has said he wants the U.K. to diverge from key EU regulations.
The U.K. government was not immediately available for comment to CNBC.