Storm clouds are seen above the Canary Wharf financial district in London, Britain, August 3, 2010. REUTERS/Greg Bos/File Photo
LONDON Britain must find a “mechanism” that gives banks based in the UK access to the European Union’s single market after the country leaves the bloc, a government minister said on Thursday.
Banks who depend on a “passport” to offer their services across the EU from a base in London, worry they will be cut off from continental customers.
“We know that the banking industry needs to have something that gives them access to the single market,” Mark Garnier, a junior international trade minister told the British Bankers’ Association annual conference.
One solution touted is so-called equivalence, whereby banks in Britain would have access to the single market if they abide by rules similar to those in force in the bloc.
Critics have said that this system is unstable, as the EU could withdraw equivalence recognition at short notice.
“We have to find a mechanism that behaves like passporting and has greater security than equivalence,” Garnier said, adding that no existing trade model with the EU provides that.
He steered clear of saying whether Britain was heading for a hard Brexit – a clean break with the EU – or soft Brexit, meaning maintaining access to the single market in return for conditions such as continued acceptance of EU migrants.
The view becoming settled in government was for neither, but for a “right” Brexit, Garnier said. “Talking about soft and hard Brexit is probably a distraction.”
(Reporting by John Geddie and Huw Jones)
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