MercoPress. South Atlantic News Agency

UK and EU advance in financial issues relating to London as global center

The deal under discussion would be based on EU’s existing system of financial market access known as ‘equivalence’, a watered-down relationship

The United Kingdom and the European Union have made progress on a deal to give London’s dominant financial center basic access to EU markets after Brexit, two British officials said, but no agreement has yet been clinched.

The deal being discussed would be based on the EU’s existing system of financial market access known as ‘equivalence’ – a watered-down relationship that officials in Brussels have said all along is the best arrangement that Britain can expect.

The Times newspaper said a tentative deal had been reached on all aspects of a future partnership on services, as well as exchange of data and including what would amount to a concession from the EU on bending the ‘equivalence’ rules.

Officials in Brussels and London said The Times report was wrong. The newspaper said it stood by the story.

“We are making progress,” a British official, who spoke on condition of anonymity, said. A second British official added that, while there was progress, nothing was finalized.

A spokesman for Prime Minister Theresa May said reports of a deal were speculation and that Britain wanted to go beyond the existing equivalence regimes.

The European Commission said a future financial services agreement would be discussed only after a Brexit divorce deal has been finalized.

Talks over a broader deal are mired in a disagreement over an Irish backstop – an insurance policy to ensure there will be no return of controls on the border between EU member Ireland and the British province of Northern Ireland if a future trading relationship is not in place in time.

Many top bankers fear Brexit will slowly undermine London’s position as the world’s biggest international financial centre, and a Reuters survey found that, so far, just over 600 are moving away.
Global banks have already reorganized some operations before Britain’s departure from the EU on March 29.