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Chancellor fears fragmentation

Hammond warns EU over UK’s global finance role

Philip Hammond: centre of the world

Chancellor Philip Hammond told a gathering of City financiers that he would challenge those in the EU trying to weaken the UK’s role as the leading global financial centre.

He would oppose those proposing “protectionist agendas disguised as arguments about financial stability” and encourage greater transparency, cooperation, and agreed standards.

Speaking at the inaugural dinner organised by the new financial industry lobby group UK Finance, he noted that cities such as Dublin, Frankfurt and Paris were vying for London-based business that may be feeling nervous about the Brexit outcome.

Mr Hammond, who earlier met several business groups including the CBI and IoD, said: “It is my priority as chancellor to ensure that the UK remains the financial services centre of the world.

“We will seek to agree new mechanisms around key issues, from dispute resolution to data protection.

“We have the timezone, the language, the legal system, the talent, the capital markets, and the tech centre to succeed.”

A fragmentation of European financial service markets would result in poorer quality, higher priced services for business and citizens across Europe, he said.

He added that he also wanted the UK to be a leader in financial technology.

Stephen Jones, chief executive of UK Finance, told guests that the UK needed “a genuinely ambitious 21st century trade deal that reflects the needs of a modern, service-based economy.

“The UK has a unique opportunity to be the trailblazer in this space – and there is a national need that we do it well.”

He said: “UK Finance is assisting Government with the development of  cross-border services agreement offering a detailed framework as we seek to position the UK as a global free trade player.”

He believed the UK government “well understood” the need for a proper transition period “that is essential to underpin cross-border financing, risk management and trade”.

Mr Jones added: “The current renegotiation of the relationship between the UK and EU economies has profound ramifications for retail and commercial banking customers in the UK and in the EU.

“I don’t want to dwell in detail on the current Brexit negotiation. Suffice to say, I am optimistic that the need for a proper transition period that is essential to underpin cross-border financing, risk management and trade is well understood by our Government.

“I believe it is understood by our EU partners. The EU recognises the UK’s critical contribution to domestic EU capital raising, financing and risk management. 

“Complex natural habitats renew – they do not die overnight when faced with change.”

UK Finance is a new trade association which was formed on 1 July to represent the finance and banking industry operating in the UK.

It represents around 300 firms in the UK providing credit, banking, markets and payment-related services.

The new organisation brings together activities previously carried out by the Asset Based Finance Association, the British Bankers’ Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association.

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