Brexit: City of London backed to thrive by Daniel Hodson

A senior MEP dismissed Brussels’ “wait and see” policy and insisted the approach would hinder Europe’s financial services industry. German Markus Ferber, of the European People’s Party, said the plan should also curb the reliance on the dollar on international markets. The veteran MEP said: “We need a clear step-by-step masterplan that helps key financial sector businesses move from the United Kingdom to the European Union.

“A mere ‘wait and see’ approach will not do to bolster European financial markets.

“One of the key strategic priorities in the years to come has to be strengthening the Capital Markets Union and moving the strategically important clearing business to the EU.”

The European Commission has granted a number of temporary equivalence measures to allow European bankers and investment managers to keep using services in the City of London after Brexit.

But a number of high-profile politicians across the EU want eurocrats to use that time to develop plans for phasing out the bloc’s reliance on UK markets.

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They want the bloc’s policies to hand boosts to financial hubs, such as Frankfurt or Paris, on the mainland.

Mr Ferber, a member of the EU Parliament’s economic affairs committee, added: “If the EU wants to play in the geopolitical Champions’ League, we need a financial system to match it.

“In light of Brexit, having a robust and powerful financial infrastructure is more important than ever.

“When it comes to financing the European economy, we must not be completely depended on third countries.”

The German also claimed this involved European governments slashing the massive piles of debt accumulated since the outbreak of coronavirus.

“A stable and attractive currency is key for the EU’s financial and economic sovereignty,” he said.

“Fiscal prudence is a prerequisite for a stable euro. One of the key challenges ahead will be to bring down the high debt levels incurred during the pandemic to a more sustainable trajectory.”

Meanwhile, Chancellor Rishi Sunak has claimed the City should prepare for a “Big Bang 2.0” – akin to Margaret Thatcher’s deregulation of the financial services sector.

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He said: “If you look at the history of the City stretching even further back than that, it has always constantly innovated, adapted and evolved to changing circumstances and thrived and prospered as a result.

“And I think it will continue to do that.”

Business chiefs have urged the Government to avoid a post-Brexit bonfire of regulation.

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Anne Richards, chief executive of Fidelity International, told the FT that the UK should focus on “re-regulation”.

Miles Celic, chief executive of TheCityUK, said: “The UK did a superb job of getting its voice heard on the regulatory debate in the EU.

“As such, it’s not a surprise that the UK industry is broadly content with the regulation we’ve just onshored – the UK was, after all, the main architect.”

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