In a white paper released by the UK government, it claimed that its aim for the banking sector is to secure the ‘freest possible trade’ between the UK and EU Member states
The vague document stated that with a ‘highly integrated sector’ such as financial services, there is mutual interest in cooperation due to the interconnectedness of markets.
The report said: “As the UK leaves the EU, we will seek to establish strong cooperative oversight arrangements with the EU and will continue to support and implement international standards to continue to safely serve the UK, European and global economy.”
Its optimistic prediction that the UK ‘remains a pre-eminent global financial centre’ is backed up by strong statistics.
In 2016, the Global Financial Centres Index ranked London as the top financial centre in the world. In addition, over 75% of the EU27’s capital markets business is conducted through the UK, which also manages £1.2trn ($1.5trn) of pensions and other assets on behalf of European clients. Approximately 37% of all European Initial Public Offerings are in the UK and the country receives more than one-third of all venture capital invested in the EU.
However, London’s future as a global financial hub depends on passporting rights. The white paper stated that keeping these passporting rights are of benefit to everyone as 5,000 UK firms utilise these rights to provide services across the EU, as well as 8,000 European companies that use passports to provide services into the UK.
In the report’s foreword, the Prime Minister Theresa May said: “We do not approach these negotiations expecting failure, but anticipating success.”