EU ministers will demand "unilateral" power over U.K. banks' access to the bloc after Brexit during talks with London starting in April, Reuters reported March 20, citing a draft it had seen.
The stance will be presented to EU leaders for approval at a March 23 summit. The draft stresses that U.K. financial firms can benefit from "reviewed and improved equivalence mechanisms," but that these mechanisms and decisions relating to them "remain defined and implemented on a unilateral basis by the European Union."
The equivalence system is a legal mechanism that gives companies from non-EU states limited access to the single market provided their regulatory regimes are deemed equivalent to that of the bloc, but it can be revoked at short notice. The EU's chief Brexit negotiator, Michel Barnier, has said a trade agreement that is open to financial services "doesn't exist."
On the other hand, the City of London's Brexit proposal for financial services seeks "mutual recognition" of its regulatory and supervisory regimes and those of the EU, with a monitoring mechanism in place for any divergence.