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With Brexit Talks Torpedoed, Hammond Makes a Pitch for Finance

As the U.K. races the clock to save Brexit talks, Chancellor of the Exchequer Philip Hammond tried to reassure the world of finance about his government’s aim to preserve London as a world-leading financial center.

“We want to protect our existing trading relationships with the EU,” Hammond said at an annual dinner organized by industry lobby group TheCityUK in London. “But we also want to ensure that the future trade arrangements we have with the EU are durable and fair.”

Hammond, who voted against the U.K. leaving the European Union, has long been an advocate for an extended grace period that will allow businesses and financial services to adapt to the reality of Brexit. Some banks plan to leave London for Frankfurt and Dublin while others await to see what kind of transitional arrangements the government will forge.

“We must act now to ensure that in the face of rapid global change, the U.K. remains the number one place in the world to conduct financial and professional services business,” he warned.

What Next?

But their confidence in the ability of Prime Minister Theresa May to deliver on a two-year transition phase — to allow them to flesh out contingency plans while Brexit talks continue — took a knock on Monday when a much-anticipated deal to move talks on the transition and trade were derailed by her Northern Irish ally over the delicate issue of what to do about the border with Ireland.

May is now scrambling to get talks back on track and the future of talks is entirely uncertain. Brexit Secretary David Davis told the U.K. Parliament Tuesday that he wanted
the whole country to remain close to economic regulations after leaving, including in the key area of financial services.

A sense of urgency was palpable in Hammond’s words: “We must develop a new paradigm for our future trading relationship in financial services.”

He also pointed out, in remarks released by his office, that “over the past 10 years, Britain has worked tirelessly with the EU to deliver financial stability and fair competition.”

“We devised the rules that have seen our banking sector recover from the global financial crisis,” he will tell the audience. “And after we leave the EU we will continue to work closely to strengthen the global financial system and protect our taxpayer

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