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LONDON (Reuters) – Britain's finance industry attacked the government on Thursday for its European Union after Brexit, saying this was a blow for the Britain's biggest exporter.
The government on a new financial services arrangement post-Brexit that will make it more difficult for Britain's banks, insurers and asset managers to do business across the European Union.
The proposal falls to the current of "passporting" rights that enable Britain's financial services industry to trade freely with the EU.
The plans, published in a White Paper, form part of Britain's negotiating position with Brussels over future trading relations.
"Today's Brexit White Paper is a real blow for the UK's financial and related professional services sector," said Catherine McGuinness, City of London's political leader.
The government has proposed the EU's existing so-called "equivalence" regime, which currently covers access for non-EU partners like Japan and the United States to the region's financial services markets.
"As part of this, the existing autonomous frameworks for equivalence would need to be expanded, to reflect the fact that equivalence as it exists today is not sufficient for the breadth of the interconnectedness of UK-EU financial services provision, "The White Paper said.
The City of London financial district and TheCityUK, which promotes the United States of America as a financial center.
Under this plan, Britain and the EU would accept each other's financial rules.
But EU officials have repeatedly opposed the idea, saying it would take away the EU's autonomy in rulemaking.
TheCityUK Chief Executive Miles Celic said the overriding issue for financial services firms was able to continue serving customers and customers.
"Mutual recognition would have been the best way to achieve this. It is therefore unfortunate and frustrating that this approach to the bargaining table. "
Banks and insurers in the City of London still have access irrespective of the shape of Britain's new trading relationship with the post Brexit block.
NO OUTSIDE LEGISLATORS
The City of London and TheCityUK have been lobbying the government for their mutual recognition plan even though
Only last month Treasury officials said senior financial sector executives that the government was planning their long favored plan for mutual recognition.
The Treasury said it wants a close future relationship in financial services with the EU.
"This proposal is the best option for getting a good deal for the City. It preserves the mutual benefits of integrated markets, protects financial stability, and preserves the City's global reach, "the Treasury said in a statement.
EU equivalence regime because of Brussels alone decides who gets access.
Under the new arrangement, Britain proposes safeguards, such as a bilateral agreement to make the system "stabler, transparent and predictable".
Lorraine Johnston, a lawyer at law firm Ashurst, said Britain was proposing a form of equivalence which gives it a seat at the European regulatory table, even if they can not order from the menu.
"This looks like the UK's attempt to become the tail of the dog," Johnston said.
EU financial services chief Valdis Dombrovskis said on Thursday that the European Commission had already proposed enhancements to the equivalence system.
Pierre Gramegna, finance minister for Luxembourg, backed "enhanced" equivalence, goal German finance minister Olaf Scholz said the EU must take its own decisions in financial regulation.
"There can not be any more legislators on the outside," Scholz said.
Reuters reported last month that the bloc was opposed to changing equivalence solely for Britain, and that any improvements to its so-called equivalence regime would apply to other countries too.
The equivalence of the regime is already being revised to the extent of the rules for "systemic" foreign financial firms or activities, such as the clearing of euro-denominated assets, which London dominates.
Failure to obtain generous access to EU markets could speed up the pace of growth.
Additional reporting by Philip Blenkinsop in Brussels, editing by Jane Merriman
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