As Brexit negotiations near, U.K. says will do whatever it takes to secure financial sector

The Sydney News.Net Friday 21st October, 2016

as brexit negotiations near, u.k. says will do whatever it takes to secure financial sector

LONDON, U.K. - The U.K. government on Thursday sought to reassure the world that Britain will look at "all possible options" to safeguard financial services during the course of Brexit negotiations with the EU.  

Britain's referendum to exit the EU has put London-based financial institutions in a fix, with ambiguity on the issue of whether they will have to relocate operations to retain access to the bloc's single market.

"We have to treat as absolutely central to what we do maintaining the stability of both the City, but also the European financial markets. The chancellor and I are determined to get the best possible deal for our financial-services sector, a crucial part of our economy... we will therefore do anything necessary," Brexit minister David Davis said in parliament.

Lawmakers questioned Davis if he believed euro-denominated clearing would be permitted in the U.K. after Brexit, with the European Central Bank demanding that euro trades are cleared in the euro area.

“It is certainly one of our major aims,” Davis said, adding, “We start at the point we leave, as it were, with absolute equivalence because we meet all of the requirements at that point and I would seek to ensure that was maintained.”

Davis' comments came ahead of Prime Minister Theresa May's visit to Brussels for her first EU summit on Thursday. May is expected to update other EU leaders on Britain's plans, including making clear that there was no further chance that U.K. will remain in the 28-member bloc.

A senior European diplomat reportedly said May faces a "critical" test of her sincerity towards Europe and the upcoming Brexit negotiations during the summit.

"The situation is just about retrievable, but this is a big moment. She absolutely needs to demonstrate that she is serious about pushing this negotiation forward in a win-win manner before it is too late to rescue the situation,” the diplomat said. 

Recent remarks on a so-called hard Brexit have dented the pound sterling, which has fallen over 17 percent since the June referendum. Davis said a weak currency could fuel inflation, even as it boosts exports.  

Another area of concern for the government has been immigration controls and prospects of hiring foreign workers after Brexit.

Davis, however, said it would not be in Britain's national interest to tamper with the free movement of talented people.

"Clearly it is not going to be in the national interest to restrict the movement of talent, the free movement of brainpower. You can be very, very confident that we will not be limiting highly intelligent, highly capable people's access," he told parliament.

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