Tuesday 8 June 2021 8:51 am

Rishi Sunak promises to protect the City from Brussels’ financial services bid

Rishi Sunak, the Chancellor, promised that the City will remain “competitive and dynamic” even in the face of Brussels’ bid to unseat it from its crown, in a private call with banks.

Sunak described the financial services industry as a “crown jewel” and, according to reports, said the country will fight to protect it.

The call included the Governor of the Bank of England as well as senior executives from Barclays, NatWest and other major UK banks.

The conversation marks the first time the Prime Minister, Chancellor and the Governor of the Bank of England have hosted a meeting of this kind with major financial services firms, where many senior figures have expressed their worries about the impact of Brexit on the industry.

The competitiveness of financial services post-Brexit as well as the economic recovery of the UK following the pandemic has been top of the agenda in the Square Mile for some time, with the industry somewhat carved out of the Christmas Eve trade deal.

Sunak has been looking at a host of changes to maintain the City’s attractiveness post-Brexit, and the Treasury has been scrutinising a number of finance regulations to reduce the red tape.

The news comes as European Union chiefs asked banks how they can help them shift their lucrative operations out of London and into the EU.

The European Commission is discussing how to shift trillions of euros in swaps contracts from the London Stock Exchange to Deutsche Boerse in Frankfurt through workshops with the industry. 

“How long would be needed to transfer positions or flows identified as clearable inside the Union? How could the time needed be potentially reduced?” was one of the questions in a document sent to the banks, and seen by Reuters. 

Financial services exports are worth £56bn, according to industry body TheCityUK, but the industry was largely excluded from the Brexit trade deal and its vital EU passporting rights have been stripped.

Bankers and investors are hoping Whitehall will let them take advantage of Britain’s post-Brexit freedoms with a shake up of City rules.