European officials have said there will be no cliff-edge drop for derivatives markets if Britain leaves the EU without a deal.
Olivier Guersent, an aide to the bloc’s head of financial services, told a Politico event: “There is no cliff edge."
He made the remarks after his boss, Valdis Dombrovskis, had said that derivatives clearing was an area of concern.
However, Dombrovskis said the private sector should move its contracts from London to the EU to mitigate risks before Brexit.
He said the EU could consider new regulations after a report, expected to be published in the coming days.
The study, led by the Bank of England and the European Central Bank, will show its initial findings into potential stability risks to markets around Brexit day.
The Financial Industries Association's chief executive Walt Lukken welcomed Dombrovskis’s comments on reaching a deal and avoiding a cliff edge.
He told City A.M: “We look forward to the publication of the Bank of England/European Central Bank report as an important step towards providing certainty that the market benefits of clearing will not be interrupted.”
A spokesperson for UK Finance said: “A ‘no deal’ scenario can and should be avoided and it’s vital there is clear focus on agreeing a managed exit.
“The government is taking a pragmatic approach to addressing critical cliff-edge issues and to ensure consumers and businesses can continue accessing vital cross-border services.
“However, these issues cannot be addressed by the UK acting alone. It is therefore crucial that progress is made by politicians on both sides. So that regulators and governments can work together to agree solutions that prevent any unnecessary disruption and additional costs for customers in both the EU and UK.”