How do you take your Brexit? Soft or hard? Quick or slow? It might all seem semantics but for the UK and Europe it is the £1.1tn question. That is the amount banks based in the UK are lending to the companies and governments of the EU27, keeping the continent afloat financially. The free trade in financial services that crosses the Channel each year, helping customers and boosting the economies in the UK and Europe, is worth more than £20bn.

Brexit means Brexit and we are all Brexiters now. But if we get it wrong, that £20bn trade in financial services is at risk and the public and political debate is taking us in the wrong direction. At the banking industry’s annual conference last week, the atmosphere was, as one of the panellists, Lord Mandelson, noted, “gloomy”. The government, and in particular the chancellor, Philip Hammond, and the Brexit secretary, David Davis, are making the right noises. The golden rule of negotiations is start big and never ask for less than you want. But we are in danger of talking ourselves into defeat before negotiations have even begun.

There is a consensus that the EU’s integrated financial market is one of its great success stories. It makes it easier and cheaper for French farmers, German manufacturers and Italian fashion designers to secure funding. It helps EU citizens get better returns for their savings. And it also creates jobs, not least in the UK, where financial services as a whole employs more than a million people, two-thirds of them outside London. Full Story

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