UK’s Hammond to reassure bankers in speech he will protect them in Brexit

By David Milliken

LONDON (Reuters) – Britain’s finance minister will try to reassure bankers on Thursday that he will protect their interests as London leaves the EU, with a major speech emphasizing open trade and financial services industry relationships both with Europe and beyond.

Philip Hammond, the most pro-European of Prime Minister Theresa May’s top ministers, will say he wants to see a liberalization of cross-border financial services and for London to be the world’s “undisputed gateway to financial markets”, in excerpts released by his office.

“While some question the benefits of openness … being open to the world – and being a global capital of finance – will continue to be (the) foundation of the UK’s economic success,” Hammond will tell financial leaders at the City of London’s annual Mansion House dinner.

The event is one of the major set pieces of the year for both Hammond and Bank of England Governor Mark Carney, who will also speak. It comes a day after May won an important vote in parliament on her Brexit plans, facing down rebels within her ruling Conservative Party who favor closer ties with the EU.

Although Hammond is seen as a skeptic of a hard break with the EU, the emphasis on global trade in the excerpts from his speech echoes a theme of more enthusiastic Brexit supporters among May’s Conservatives, who say Britain can benefit from escaping the bloc to do trade deals with further-flung nations.

Hammond will say that after Brexit, he wants to strike fresh global financial partnerships, based on new free trade deals and existing dialogue with countries like China and India.

He will also reiterate that he wants the EU to discuss an ambitious future financial services relationship with Britain.

Progress on this key demand of Britain’s financial sector has been slow. For months the government, financial regulators and major banks in Britain have backed a “mutual recognition” blueprint for two-way market access after Brexit. But facing scepticism from Brussels, financial executives told Reuters last week they no longer believe it is realistic.

In a speech before Hammond’s, the Lord Mayor of the City of London, Charles Bowman, a figurehead for the financial services industry, plans to emphasize the industry’s desire for streamlined immigration procedures and a comprehensive trade agreement with the EU that covers financial services.

“We welcomed the government’s March announcement that there will be a transition period … but even with this in place, there are significant risks, such as those around contract continuity and data flows, that must be addressed.”

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