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[...]Testifying before the European Parliament in Brussels, Mr Dijsselbloem said forcing Britain to adopt EU rules in exchange for access the EU’s market in financial services was a point on which the rest of the EU will “have to take a firm stand” with London.
“Being quite frank, we can’t allow the financial service centre for Europe and the eurozone to be outside Europe and the eurozone, and to go its own way in terms of rules and regulation requirements,” he said.
“We can’t allow that to happen.”
The fate of Britain’s financial services industry is shaping up as one of the principal faultlines in the UK’s EU exit talks. There is speculation in the City over whether the British government will seek to retain the passport or rely instead on more piecemeal, third-country access rules built into various European regulations.
Leading Brexiters insist leaving the EU would allow the sector to throw off what they say is unnecessary red tape that is holding back its competitiveness.
Any such regulatory freedom will come at a high cost in terms of market access, Mr Dijsselbloem said.
“We cannot allow a third country to have access, full passporting rights, to financial services markets in Europe, if at the same time we allow them to deviate in terms of capital standards, requirements, consumer protection etc,” he said.
This would mean sticking not only with existing EU rules but fully taking on board any future update of EU regulations. [...]
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