Minister for the City of London, John Glenn, has said the EU and UK negotiating teams have made “further progress” on a trade deal for financial services after next March's scheduled Brexit separation.
Speaking at the Investment Association (IA) conference in London this morning (26 June), Mr Glen said: “Negotiations seldom follow a linear path, details can be slow to emerge and at times they can look difficult or even impossible. But I am aware of the importance to the industry of us providing progress and detail.
"The UK will soon release a white paper setting out our detailed proposals. A loose arrangement between the UK and the EU wouldn't work, it wouldn’t work for either side. Our markets are inter connected, and our rule books are identical, as is our commitment to standards.
"It is not in the UK or the EU’s interests to have financial services excluded from a trade deal.”
The minister criticised the EU view that the UK should be treated as a “third country” for financial services is “disappointing” as those rules are “piecemeal and unpredictable.”
His comments at the conference came after the former Labour cabinet minister Lord Mandelson, speaking at the same event, said the UK should seek an extension to the Article 50 process and not leave the EU as is scheduled, next March.
Britain voted to leave the European Union group of 28 states in June 2016. In March 2017, Article 50 of the Lisbon Treaty was triggered by the UK government, meaning the country entered the formal process of withdrawal, which is timetabled to complete by March 2019, if an agreement can be reached among all the parties.
Before March 2019, one of the points on which an agreement must be reached is on cross-border trade, which is crucial to how UK financial services is able to operate, and how it is regulated.
Earlier at the Investment Association event in London, Christopher Woolard, executive director for strategy and competition at the Financial Conduct Authority, chastised the European Union's (EU) approach to Brexit as not helpful for regulation and financial services.
He said the EU approach to the negotiations that “nothing is agreed until everything is agreed” is a problem for financial services regulators.
Mr Woolard said the FCA is in ongoing talks with its European counterparts.
"[As] regulators we have to follow the political timetable, there has been a lot of conversations with the regulators in the EU, it is in everyone’s interests to do this because the markets are inter connected and it is important to have mutual recognition”.
But he added the current EU view “makes it very hard to pin down” a regulatory framework for financial services after Brexit.
He added that the EU stance “is not attractive”, for this reason.
As FTAdviser has previously reported, the chief executive of the FCA, Andrew Bailey, has said Brexit is not a reason for there to be restrictions on financial services and trade.