No financial services deal at any cost, new FCA boss warns Brussels

The boss of the City watchdog has fired a warning shot at Brussels, saying Britain will not accept a financial services deal with the EU ‘at any cost’.

Nikhil Rathi, who took over at the Financial Conduct Authority (FCA) last year, said the increased flexibility which the UK has to set its own rules post-Brexit could ‘make our markets work better’.

In a speech to the Association of Foreign Banks, he also said that the EU was shooting itself in the foot by failing to agree a deal, as banks in the bloc were losing business because they did not have access to all of the UK’s deep pools of liquidity.

Confidence: Nikhil Rathi, who took over at the Financial Conduct Authority last year, said the increased flexibility which the UK has post-Brexit could ‘make our markets work better’

The vote of confidence in the UK’s ability to make its own way come amid drawn-out talks between Treasury officials and their EU counterparts, as both sides try to hammer out a deal for financial services.

Britain was hoping to gain ‘equivalence’ for its valuable financial sector – an arrangement meaning both sides would recognise each other’s rules, allowing for seamless trade across borders.

But EU officials have so far been unwilling to strike such a deal.