The British minister responsible for the country's financial services sector, John Glen, told an audience of bankers Dec. 4 that the deal secured by Prime Minister Theresa May to quit the European Union was "good for the City."

He said the deal, which must pass a vote in the House of Commons on Dec. 11, would minimize disruption for financial services when the U.K. leaves the EU on March 29, 2019.

A significant number of May's own lawmakers have already publicly committed to voting against the agreement. The deal is also opposed by the opposition Labour Party and other parties in the Commons making the arithmetic required for the deal to pass "challenging," in the words of cabinet minister Michael Gove.

However, Glen said if the deal was rejected by Members of Parliament, then the country would be "back to square one" and that would "threaten the stability of the City."

He promised that the deal, which he said was within reach, would provide a relationship for financial services of greater depth than the EU has with any other third country.

Glen said the regime of "equivalence" on regulation, which would see the U.K. and the EU agree to accept each other's rules as leading to the same outcomes, would recognize that the U.K. was a hub for financial services which benefited both the EU and the U.K. He pointed to the provision in the political declaration which accompanies the withdrawal agreement, which would see agreement on the future shape of equivalence drawn up between the two sides by June 2020.

"The deal establishes the ability to improve on [existing] equivalence regimes in time frame and scope," he said.

Equivalence regimes

The EU already has equivalence regimes in place with more than 30 countries including the U.S. and Japan, but retains the right to unilaterally withdraw from these arrangements. The U.K. is hoping for an agreement which would create bilateral arrangements to make a sudden break less likely.

Glen said the deal negotiated by the government was the best possible one for the financial services sector, which he described as the "lifeblood" of the real economy. He also stressed that the deal allowed the U.K.'s financial services sector to strike agreements with other countries, and noted that 56% of the U.K.'s financial services exports are to countries outside the EU, where the world's fastest-growing economies are established.

The aim of the deal, he said, was to solidify London's position as home to the deepest, most liquid markets in the world.

The audience at the FT Banking Summit had earlier voted in a straw poll, by a two-thirds majority, against the motion that the European Union provided the right environment for banks to thrive.

Peter Bosek, chief retail officer of Austria's Erste Group, said the EU's regulatory environment was not focused on growth and compared it unfavorably to the U.S.